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Boom is coming...just not yet

The first issue of GE I worked on as editor carried the 2011 Geotechnical Services File (GSF) which marked a painful period for the sector showing the peak of the recession impact. This year’s GSF gures show the sector is well and truly back to pre-recession revenue levels.

What hasn’t changed is the impact of delayed projects on the sector. In the first few years of doing the GSF, the talk was always that Hinkley is coming and finally it has with great progress being made on the ground engineering work. Now it is HS2 that has become the Holy Grail – last year’s GSF respondents expected the ow of work from the rail scheme to create demand at the end of this year that would make 2019 a real boom year.

However, news from the Department for Transport last month that the civils work has now been postponed from this November to June 2019 means that the hoped for growth is also delayed. Investor concerns over Brexit are also resulting in project delays and compounding the effect on the previous industry predictions of 2019 being a year of significant growth with more modest gains now expected.

Nonetheless, when it does come, HS2 is expected to bring unprecedented growth – Keller chief executive Alain Michaelis has said he expects HS2 work to boost UK geotechnical industry revenues by a third. Based on the combined revenues of GSF respondents this year, that would take the value of the sector to more than £2.2bn by 2020 and Michaelis expects this boom to last two or three years.

But where will the capacity – companies, people, equipment and materials – to deliver this work come from? The skills shortage remains a major issue for 68% of companies that took part on the 2018 GSF. 

While the delay to HS2 contracts may mean that 2019 will not be a boom year, it does give the sector a little more breathing space to work out how it will ensure there is available capacity to meet the expected workload. What’s your plan?

 

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