Civils contractors have said Network Rail’s Supplier Spend Report for 2024/25, published today, highlights substantial opportunities for UK construction in the rail sector, but also shows industry continues to face inflationary pressures.
The publication sets out £8.8 billion of supply chain investment in the first year of Control Period 7 (CP7) and reports that Network Rail’s direct spend on SMEs is falling due to delivery model changes, despite SMEs making up 70% of its suppliers.
Network Rail reports that the distribution of its spend has shifted from renewals to maintenance and refurbishment – with greater emphasis on climate resilience – in response to period of 40-year highs in inflation.
Commenting, spokesperson for the Civil Engineering Contractors Association (CECA) and Director of CECA Midlands Lorraine Gregory said: “Our members are at the heart of delivering the safe, reliable and resilient railway that passengers and freight depend upon.
“The UK’s rail industry is the backbone of our economy and is key to our infrastructure future.
“This report shows the scale of opportunity available across the supply chain, but also the challenges facing businesses, as high inflation and reprofiled workbanks place pressure on margins and visibility.
“CECA will continue to work closely with Network Rail and Government to ensure contractors of all sizes have the confidence to invest in skills, innovation and delivery capacity.
“With significant opportunities ahead, it is vital that industry and clients work together to deliver the railway Britain needs, and to combat the adverse business conditions that contractors face when delivering for rail users and communities across the country.”
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