SUMMARY OF REPORT CONTENTS
UK
Utilities Connections Market By value
(£bn at current prices)
The utilities connections market is closely aligned
with levels of non-domestic construction output and housebuilding.
In addition, the health of the utilities construction market also
impacts on the value of the connections sector.
Utilities connections experienced 10% decline in
value in 2009 as a consequence of falling output levels in the
housebuilding and non-domestic construction sectors.
The chart, above, illustrates our estimates of market
performance from 2007 with current forecasts of anticipated
performance through to 2012. Expectations for 2010 remain mixed with
housing completion numbers again expected to dip and more difficult
times expected for key non-domestic sectors; however impetus for
growth is likely to be derived from higher value connections in the
gas, electricity and telecoms sectors.
Drivers for growth in the in utilities connections
market in recent years have included further penetration into
existing domestic and commercial/industrial premises. Factors such
as switching of main fuel type, upgrading of systems, conversions
and extensions to existing buildings and the increased use of
renewable energy had all assisted with both volume and value growth
in recent years.
Increased competition from independent connections
organisations in the gas sector has also contributed to significant
reduction in average gas connections values over the last 2-3 years
with 35% reduction experienced 2006-09. Electricity connections have
also been affected by falling average connections prices; however
the level of competition in the sector is not as advanced as that in
the gas sector with significant decline in low voltage connections
concentrated in the domestic sector cited as one of the main reasons
for falling average prices.
The opening of the connections market to competition
over the last 10-12 year via the option to use alternative
contractors for the “contestable” connections works has seen the
emergence of a number of specialist “multi-utility” providers who
can supply some or all mains utility connections to their customers.
These include utilities companies operating outside their own
specialist areas. In addition, several independent companies, many
of which are divisions of major construction contractors with no
direct links to utility providers, have also entered the market.
Prospects for utilities connections remain relatively
optimistic with output value growth currently expected to reach
£1.30bn by 2014, approximately 21% higher than value estimated for
2009. Key to this growth is likely to be increased demand from the
recovering housebuilding and non-domestic construction sectors
whilst developments in the telecoms and renewable energy sectors are
also likely to provide impetus for growth. The connections market is
also likely to be further exposed to increased competition in terms
of supplies with significant potential for growth of independents in
the electricity connections sector.
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