UK Construction: Consolidation ahead

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Recovery has arrived

With significant opportunities in areas such as infrastructure and housebuilding, UK construction has grown for eight consecutive quarters. This should provide a backdrop in which the UK construction industry thrives. This however, is not the case. Contractors, SMEs and civil engineers all report increasing costs pressures which are squeezing margins.

Consolidation is inevitable.

By 2020 we think the top 15 could consolidate into five leading companies with each delivering:

>£50m

minimum project threshold, with

>£5b

in revenue

c0.5%

RoIC

5

service lines
enabling complex services

 

This process will mirror that seen in comparable industries where supply base has consolidated around leading participants eg: automotive tier 1, aerospace and professional services.

In addition, we expect a second tier of regional players will play a key role, providing specialist skills and/or local delivery capabilities.

EY - UK Construction: Drivers for consolidation

Drivers for consolidation

EY - UK construction companies - key financial metrics

UK construction companies – key financial metrics

EY - UK Construction: What will the top 5 entities look like in 2020?

What will the top 5 entities look like in 2020?