In today’s news, we will look into Ferrovial which will be responsible for the design and construction of a cable tunnel that will be 2.2 kilometres long and have a high voltage of 400 kilovolts. Introducing a new client, National Grid, with a project launch. Building methods that are both ecologically friendly and innovative will be at the forefront of the industry. Furthermore, the RICS UK Construction Monitor for the fourth quarter of 2024 suggests that there is a growing sense of optimism regarding the future of the construction industry. This is because the construction sector continues to be relatively stable. In addition, the most recent S&P Global index indicates that production in the construction industry had a decline across the board in January 2025. This is the first time in nearly a year that the construction PMIs have shown a fall in economic activity. The month of February 2024 marks the beginning of this decline.
National Grid Awards Ferrovial £230m UK Tunnelling Contract
Original Source: Ferrovial to deliver new £230m tunnelling contract in the UK for National Grid
A high voltage (400kv) cable tunnel, measuring 2.2km in length, will be designed and constructed by Ferrovial. Launch project for National Grid, a new client. At the forefront will be innovative and environmentally friendly building practices.
National Grid has signed a deal with Ferrovial’s UK Construction business to modernise the electrical infrastructure from Grain to Tilbury, with a value of around £230 million. Beginning in early 2025 and continuing until the first quarter of 2029, this massive new scheme demonstrates Ferrovial’s dedication to providing the United Kingdom with first-rate, environmentally friendly infrastructure solutions.
The Great Grid Upgrade, the most extensive restoration of the electrical network in the United Kingdom in decades, includes this project and a wide range of others intended by National Grid. Building a new 2.2km long high voltage (400kv) cable tunnel, headhouses, Cable Sealing End (CSE) compounds and two 35m deep shafts (15m and 12m diameter respectively) are all part of the deal, and it will be delivered by an integrated joint venture between Ferrovial Construction and BEMO (Ferrovial BEMO JV).
To guarantee the maximum levels of efficiency and safety, Ferrovial BEMO JV will use cutting-edge engineering methods and technology.
A Vertical Shaft Sinking Machine (VSM), which is well-known for its precision and dependability, is going to be used in the project. Construction time, environmental effect, and operational safety can all be greatly enhanced with the help of VSM technology, which enables surface-to-surface excavation and final-lining installation all at once. The VSM is perfect for the Grain to Tilbury project since it can be operated beneath groundwater. In the United Kingdom, this is going to be applied for the second time.
As a market leader, Ferrovial Construction has completed numerous complicated tunnelling projects in the United Kingdom. Several tunnelling projects have been completed in the United Kingdom. These include the Thames Tideway Tunnel, the Silvertown Tunnel, the Northern Line Extension, and three contracts on the Elizabeth Line. The latter two included the construction of Farringdon Station and the longest section of tunnel between Royal Oak and Farringdon.
Ferrovial Construction will further establish itself in the UK market with the Grain to Tilbury project.
In 2025, Infrastructure to Be the ‘strongest Performing Sector’
Original Source: Infrastructure to be ‘strongest performing sector’ in 2025
As the construction sector continues to be relatively steady, the RICS UK Construction Monitor for the fourth quarter of 2024 indicates that there is a growing sense of optimism over the construction industry’s future.
The research indicates that there has been a slight increase in activity in the Infrastructure sector, even though the picture is more positive in other areas.
There was a little decrease in total activity across the entire construction industry, which went from +2% in the previous quarter to -1%in the current quarter. This resulted in headline workloads entering the negative region.
When the data is broken down, it can be seen that new workloads had a minor decrease of 0 to -4%, whilst repair and maintenance showed a slight increase from +11% to +13%.
When broken down by industry, the infrastructure sector continued to be the most successful, producing a net balance of +12%, which was significantly lower than the +17% recorded in the third quarter.
The energy subsector of the infrastructure industry posted the strongest net balance reading for another quarter with a reading of +35% for the fourth quarter. Rail, on the other hand, continues to be the worst subsector, with a reading of 0% (Q3: +1%).
The amount of work being done in all other areas remained rather low.
Financial restrictions remained a significant obstacle, as indicated by the fact that 62% of respondents cited it as one of the most significant worries for their operation. This was followed by issues about planning and regulation, as well as labour shortages, which accounted for 41% of the respondents.
On the other hand, when looking ahead to the next twelve months, workload expectations continue to be optimistic, resulting in a headline net balance of 20% which is the same as 24% in the third quarter of 2024.
Infrastructure is still forecast to be the sector that will perform the best, with a net balance of +30%. This is in comparison to the private residential sector, which is expected to perform +20%, and the private non-residential sector, which is expected to perform +15%.
According to the most recent net balance result, there is little indication that there will be a turnaround in terms of profit margin forecasts. Seven per cent of respondents anticipate a loss over the next twelve months, which is a decrease from three per cent in the past.
Additionally, the employment forecast for the industry for the following year is expected to remain strong, with a net balance of 18%, which is the same as it was in the third quarter.
Business Activity Fell in February Construction PMIs
Original Source:February construction PMIs show decline in business activity
According to the latest S&P Global index, production in the construction industry fell across the board in January.
This is the first decline in economic activity seen in the construction PMIs for nearly a year, dating back to February 2024.
Expenditure price increases have also reached their greatest level in twenty-one months.
For the first time in 10 months, building permits have decreased.
House building fell to 44.9 in January, the steepest loss since January of last year; civil engineering fell to 44.6; and commercial construction fell to 48.9, bringing the overall UK construction decline from 53.3 in December to 48.1 in January.
A decrease in new orders caused by client uncertainty, an ongoing increase in input prices as a result of suppliers’ increased energy, transportation, and wage expenses, and a decrease in vendor performance as a result of shipping delays are all factors that contributed to the decline in all areas.
Business optimism has hit rock bottom since October 2023 as a result of all this.
“Due to gloomy economic prospects, elevated borrowing costs, and weak client confidence, workloads were subdued, leading to the first decline in UK construction output in nearly a year,” stated Tim Moore, economics director at S&P Global Market Intelligence.
In January, production levels fell everywhere, but the home improvement and civil engineering sectors saw the steepest drops.
The construction industry saw its worst decline in residential work in a year as a result of very calm market circumstances. Despite substantial legislative support for house development and promises for a longer-term increase in supply via planning reform, anecdotal evidence revealed that caution regarding the demand for new projects was prominent at the start of 2025.
Indicators from the survey that look ahead were likewise somewhat gloomy in January. There have been numerous instances of clients delaying their decision-making, which led to a sharp decline in new orders, the fastest seen since November 2023. Business activity forecasts fell to their lowest point in fifteen months as a result of reduced workloads and worries about the overall UK economic environment.
On the supply side, things didn’t improve much because, for two years, transportation delays caused vendor lead times to increase the most. In January, demand for construction materials declined once more. However, as a result of suppliers trying to pass on the growing prices of electricity, gasoline, and wages, purchase price inflation reached its highest level since April 2023.
The construction industry responds to the PMIs for February
Anecdotal evidence indicates that firms remain buoyant about the possibility for future development, despite this month’s decrease and continued issues such as persistent inflation and supply bottlenecks, according to Max Jones, director of Lloyds’ infrastructure and construction team.
The decline in momentum for construction output growth that began in December has persisted into January, according to Lauren Pamma, head of energy and infrastructure at Aldermore Bank. “All three main categories of construction activity—residential, civil engineering, and commercial construction”—have shown weaker performances. But there’s cause for optimism: last month’s inflation numbers were lower than predicted, so the base rate might begin to fall as early as today. This has the potential to boost demand for new projects while simultaneously lowering slightly increased borrowing prices.
There are hints that this year might be better than 2024 in the end, but it will be a while before we see sustained improvement. The industry stands to gain from the government’s infrastructure investments and pledge to raise housebuilding ambitions, but supply chains may face disruptions in the future due to the uncertainty surrounding cross-border tariffs.
If other countries move their goods away from the US and away from tariffs, it might hurt British goods that compete with them in other markets. From what we can see, a significant portion of construction SMEs have had supply chain delays in the past year, with the percentage expected to rise. Small and medium-sized enterprises (SMEs) will keep an eye on the political climate to determine the full extent of the effects on the construction industry since the future is uncertain at the moment.
Summary of today’s construction news
Overall, a contract worth around £230 million has been inked between National Grid and Ferrovial’s UK Construction division to upgrade the electrical infrastructure between Grain and Tilbury. Starting in early 2025 and running until the first quarter of 2029, this enormous new project showcases Ferrovial’s commitment to delivering top-notch, eco-friendly infrastructure solutions to the UK. However, while some areas are looking better, the data shows that activity in the infrastructure sector has increased slightly. The infrastructure sector remained the most successful when split down by industry, with a net balance of +12%, a marked decrease from the +17% reported in the third quarter. Additionally, building permits have declined for the first time in ten months. All areas experienced a fall, including new orders, input prices, and vendor performance. This was due to a combination of issues, including customer uncertainty, suppliers’ increased energy, transportation, and payroll expenses, and shipping delays.
