Growth sectors opportunity and advantage
We are focusing our attention on four sectors: transport, power and energy, water and mining.
These are characterised by strong growth drivers and large, complex projects that demand our broad range of knowledge and capabilities. Increasing project scale and complexity are driving new approaches to procurement, as clients seek greater efficiency through partnering with suppliers who can deliver a solution rather than just an asset.
The transport market – including highways, rail, ports and aviation – is worth around £710 billion per annum, globally. Strong growth drivers in both developed and emerging economies include capacity constraints, environmental targets and the poor state of existing networks. Procurement trends are positive, with growth in design-build and PPP contracts, more outsourcing of operations and maintenance, and increasingly sophisticated client-supplier relationships.
Power is another large, sustainable market. It is worth around £440 billion per annum, split roughly equally between generation and transmission. Growth drivers are the carbon agenda and the need to replace ageing assets in developed markets, and economic and population growth in developing countries. Whatever the generation technology, demand for new and strengthened transmission networks will remain strong worldwide.
Water abstraction, treatment and distribution projects are worth some £360 billion per annum. Growth is driven by urbanisation, demographics and rising environmental standards – and public providers are increasingly seeking private sector involvement. The UK benefits from a mature regulatory regime and high visibility from five-year planning cycles, and US activity is benefiting from an upturn in residential building. Emerging markets are growing equally strongly as many developed and emerging economies face water shortages, which are driving demand for desalination.
The mining market is easing after a decade of very strong growth, but still has positive long term growth drivers.
Large clients are typically multinationals that favour suppliers they can work with in multiple territories and most procure major projects under umbrella engineering, procurement and construction management (EPCM) contracts. This represents a significant opportunity for us as we develop our EPCM capability – particularly since mining developments, notably for coal and iron, typically require major investment in power, rail, ports and water assets where we provide expertise and delivery capability.