Work on M25 keeping the wheels turning at Balfour Beatty


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British infrastructure company Balfour Beatty said on Friday it continued to trade in line in the first six months of the year, boosted by infrastructure spend and cost cutting.

In a broadly similar statement to its interim management statement in May, Balfour said its order book is expected to be in line with the £12.8billion ($21.04billion) reported in 2008.

The construction giant has just started work widening 40 miles of London's orbital M25 motorway, a contract worth £6.2billion.

M25

Wide boy: The construction giant has just started work adding a lane to 40 miles of London's orbital M25 motorway


The global group, whose activities span engineering, construction and road and rail transport, said rail is the only sector to lag in the first half of the year.

However it recently secured a £130million track renewal deal with London Underground and an £80million deal with Network Rail.

Britain's construction sector has been hit by the economic downturn, with house building activity at record lows and the commercial property sector remaining under pressure.

There was a slight deepening in the contraction in Britain's construction sector in June and with nearly a third of construction firms reporting job cuts, according to new data published on Thursday.

The Chartered Institute of Purchasing and Supply/Market construction PMI index fell to 44.5 from 45.9 in May, after reaching a 12-month high of 45.9 in May.

'Overall, the evidence suggests that the worst of the contraction is over for the construction sector, but it is still very fragile,' said Howard Archer at Global Insight.

'The sector is being helped to a limited extent by the government bringing forward some infrastructure spending as part of its efforts to boost the economy,' he added.

Balfour Beatty's focus on public sector contracts, which make up 85 per cent of its order book, means it has stayed relatively immune to the downturn, but concerns remain.

'No-one in the sector is immune to the impact of falling private sector demand and potential government spending reductions, but Balfour is much less exposed than many in the sector,' said analysts at Numis in a recent note.

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