UK: The Civil Engineering Contractors Association has said Network Rail’s Supplier Spend Report for 2024-25 ‘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’.
Network Rail’s report published in August sets out £8·8bn of spending with the supply chain in the first year of Control Period 7, a 3% decrease compared to the average annual spend across CP6 (adjusted for inflation), although the infrastructure manager said lower spending the first year of a Control Period is typical.
The distribution of spend has shifted from renewals to maintenance and refurbishment to extend asset life, with greater emphasis on weather resilience.
SMEs making up 70% of Network Rail’s 4 080 suppliers, but direct spend on SMEs is falling owing to a shift towards integrated delivery models and consolidated frameworks.
Confidence to invest in skills, innovation and capacity
Commenting on the report, CECA spokesperson Lorraine Gregory said ’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.’
In the report, Network Rail notes that ’many of our suppliers have operations in the USA, China, other parts of Asia, and across Eastern and Western Europe, and are being impacted by shifting market dynamics and geopolitical pressures.
’The ongoing resilience of our supply chain relies not only on our ability to anticipate and mitigate these disruptions, but also on how UK-based companies adapt, fill emerging gaps, and capitalise on opportunities arising from changes in global trade. We anticipate shifts in how goods and services are sourced into the UK, as global suppliers adjust their strategies, pursue new markets, and expand their trading relationships.’
