PRESS RELEASE BY MBD...

UK RAILWAY ENGINEERING MARKET RESEARCH REPORT

RELEASED: MARCH 2008

After researching the UK railway engineering market development and taking into account various other factors the following conclusions can be drawn from MBD's report:

MARKET REVIEW 2003-2007:

In 2006/07, capital spending on rolling stock, track, renewals, new routes and electrification, signalling, building, plant and equipment increased by 5% to £4092 million. During the five year review period investment levels fluctuated somewhat. Expenditure increased in the first two years reviewed, reaching a peak of £5731 million in 2003/04. However this was more than negated by strong declines of 19% and 16% in the following two years. Overall, investment is believed to have declined by 12% between 2002/03 and 2006/07. MBD believe sustained government backing for much needed investment allows planned and postponed projects to now proceed. The SRA has also done much to manage investment in rolling stock cycles by awarding preferred bidder status to train operating companies that have sustained investment and by lengthening franchise periods.

MARKET FORECAST 2008-2012:

Total investment in the rail industry in Great Britain is anticipated to decline in the short-term, with a decline of 6% forecast for 2007/08. However this downward trend is expected to be reversed in the following four years, with total investment forecast to be increased by a strong 49% between 2007/08 and 2011/12. In the first half of the forecast period much of the investment is expected to be driven by Network Rail’s plan to invest up to £1.2 billion per annum between April 2007 and March 2009. Furthermore, in its recent Rail White Paper the Government announced that more than £10 billion would be spent on expanding capacity in the rail network between 2009 and 2014. Moreover, Network Rail announced in its Strategic Business Plan 2007, that a £30 billion investment in the rail infrastructure is needed over the next five years. Other major projects likely to influence the level of investment in the industry, especially towards the end of the forecast period are the Intercity Express Programme and Crossrail. Furthermore, in 2011 a number of franchises are expected to be re-tendered which MBD believe will lead to higher levels of investment.

NOTE TO EDITORS:

Market & Business Development Ltd specialises in business to business market research. The range of reports and industries in which we operate in constantly expanding (our portfolio comprises of more that 140 titles). All our reports are written by in-house market consultants.

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