Industry Statistics and Trends
Market size and recent performance (2015-2030)
Industry revenue has grown at a CAGR of 4.6 % over the past five years, to reach an estimated £1.2bn in 2025.
Trends and Insights
Government-backed projects underpin revenue and mix up industry dynamics
- The industry’s performance has been overwhelmingly shaped by government-backed mega-projects, which have provided an array of opportunities that have required large capacity and technical specialisation. The sheer volume of work generated by the HS2 programme has been a key driver of industry revenue. According to the Department for Transport, £40.5 billion had been spent on HS2 by April 2025, of which a sizeable amount has gone towards major tunnelling contracts, demonstrating the vast investment contractors have reaped from the project.
- Additional trends and insights available with purchase
Source: IBISWorld
Industry outlook (2025-2030)
Market size is projected to grow over the next five years.
Trends and Insights
The industry is set to be boosted by renewed infrastructure investments
- In the coming years, the industry will be boosted by a renewed commitment to infrastructure activity. The UK government announced in July 2025 a new 10-year strategy that sets out at least £725 billion in public funding for infrastructure projects. Projects in the pipeline, like the Lower Thames Crossing, will provide contractors with fresh sources of revenue following the conclusion of major projects like the Thames Tideway Tunnel and the end of multiple HS2 tunnel boring projects. The provision of this long-term demand signal will also encourage larger construction companies to continue investing in improving the quality of their tunnelling capital and staff, which will boost productivity.
Biggest companies in the Tunnel Construction in the UK
| Company | Market Share (%)
2026 | Revenue (£m)
2026 |
|---|---|---|
Skanska Construction UK Ltd | 74.8 | |
Balfour Beatty Group Ltd | 73.0 | |
Strabag UK Ltd | 49.5 |
To view the market share and analysis for all 4 top companies in this industry, view purchase options.
Products & Services Segmentation
Source: IBISWorld
Industry revenue is measured across several distinct product and services lines, including Construction and Maintenance. Construction is the largest segment of the Tunnel Construction in the UK.
Trends and Insights
Major civil engineering projects are lifting the revenue tunnel construction generates
- Tunnel construction encompasses the excavation, support and building of tunnels for various applications, including road transport, rail networks and utility systems like water and sewerage. Tunnelling activity can happen above or below ground and typically uses Tunnel Boring Machines (TBMs).
- More insights available in the full report
Table of Contents
About this industry
Industry definition
The Tunnel Construction industry includes civil engineering companies contracted to design, construct and maintain tunnels in the UK. Industry projects can consist of new work, reconstruction and repairs. This industry’s specialism is limited to tunnels and does not include road and highway construction or related activities.
What's included in this industry?
Products and services covered in the Tunnel Construction industry in the United Kingdom include Construction and Maintenance .Companies
Companies covered in the Tunnel Construction industry in the United Kingdom include Skanska Construction UK Ltd, Balfour Beatty Group Ltd and Strabag UK Ltd.Purchase this report to view all 4 major companies in this industry.
Related Terms
Related terms covered in the Tunnel Construction industry in the United Kingdom include tunnel boring machine (tbm), strata and public-private partnership (ppp).Industry Code
SIC 42.13 - Tunnel Construction in the UK
Performance
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Analyst insights
Sustainability has become more prominent in industry practices. With growing contractual requirements to lower carbon emissions, the importance of sustainability is now refle...
In this chapter (4)
- Current Performance
- Outlook
- Volatility
- Life Cycle
Key metrics
- Annual Revenue, Recent Growth, Forecast, Revenue Volatility
- Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
- Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
- Total Profit, Profit Margin, Profit per Business
Charts
- Revenue, including historical (2015-2024) and forecast (2025-2030)
- Employees, including historical (2015-2024) and forecast (2025-2030)
- Businesses, including historical (2015-2024) and forecast (2025-2030)
- Profit, including historical (2015-2025)
- Industry Volatility vs. Revenue Growth
- Industry Life Cycle
Detailed analysis
- Trends in supply, demand and current events that are driving current industry performance
- Expected trends, economic factors and ongoing events that drive the industry's outlook
- Key success factors for businesses to overcome volatility
- How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.
Products and Markets
Learn about an industry's products and services, markets and trends in international trade.
Analyst insight
Major civil engineering projects like HS2 boost tunnel construction revenue. The extensive tunnelling work needed for nationally significant civil engineering projects like H...
In this chapter
- Products & Services
- Major Markets
Key metrics
- Largest market segment and value in 2025
- Product innovation level
Charts
- Products & services segmentation in 2025
- Major market segmentation in 2025
Detailed analysis
- Trends impacting the recent performance of the industry's various segments
- Innovations in the industry's product or service offering, specialization or delivery method
- Key factors that successful businesses consider in their offerings
- Buying segments and key trends influencing demand for industry products and services
Geographic Breakdown
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
Analyst insights
An abundance of projects attracts a large number of contractors to London. With extensive transport and utility networks, investment in infrastructure expansion and maintenan...
In this chapter (1)
- Business Locations
Charts
- Share of revenue, establishment, wages and employment in each region
- Share of population compared to establishments in each region in 2025
Tables
- Number and share of establishments in each region in 2025
- Number and share of revenue each region accounts for in 2025
- Number and share of wages each region accounts for in 2025
- Number and share of employees in each region in 2025
Detailed analysis
- Geographic spread of the industry across Europe, and trends associated with changes in the business landscape
- Key success factors for businesses to use location to their advantage
Competitive Forces
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Analyst insights
Specialist machinery like Tunnel Boring Machines (TBMs) has very few suppliers. A lack of available substitutes for advanced machinery that's essential in tunnel construction...
In this chapter (4)
- Concentration
- Barriers to Entry
- Substitutes
- Buyer & Supplier Analysis
Key metrics
- Industry concentration level
- Industry competition level and trend
- Barriers to entry level and trend
- Substitutes level and trend
- Buyer power level and trend
- Supplier power level and trend
Charts
- Market share concentration among the top 4 suppliers from 2020-2025
- Supply chain including upstream supplying industries and downstream buying industries, flow chart
Detailed analysis
- Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
- Key success factors for businesses to manage the competitive environment of the industry.
- Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
- Key success factors for potential entrants to overcome barriers to entry.
- Competitive threats from potential substitutes for the industry’s own products and services.
- Key success factors for how successful businesses can compete with substitutes.
- Advantages that buyers have to keep favorable purchasing conditions.
- Advantages that suppliers have to maintain favorable selling conditions.
- Key success factors for how businesses can navigate buyer and supplier power.
Companies
Learn about the performance of the top companies in the industry.
Analyst insights
Costain develops new automated technology solutions. The new Automated Tunnel Robotic Installation System (ATRIS) developed by Costain will reduce its reliance on workers and...
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2021 through 2025
- Major companies in the industry, including market share, revenue, profit and profit margin in 2025
- Overview of Skanska Construction UK Ltd's performance by revenue, market share and profit margin from 2019 through 2025
- Overview of Balfour Beatty Group Ltd's performance by revenue, market share and profit margin from 2019 through 2025
- Overview of Strabag UK Ltd's performance by revenue, market share and profit margin from 2019 through 2025
- Overview of revenue, market share and profit margin trend for one additional company
Detailed analysis
- Description and key data for Skanska Construction UK Ltd, and factors influencing its performance in the industry
- Description and key data for Balfour Beatty Group Ltd, and factors influencing its performance in the industry
- Description and key data for Strabag UK Ltd, and factors influencing its performance in the industry
- Description, key data and performance trends for one additional company
External Environment
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Analyst insights
Safety is paramount in tunnel construction. The Road Tunnel Safety Regulations and CDM requirements require companies to conduct comprehensive planning for projects and have ...
In this chapter
- External Drivers
- Regulation & Policy
- Assistance
Key metrics
- Regulation & policy level and trend
- Assistance level and trend
Charts
- Regulation & Policy historical data and forecast (2015-2030)
- Assistance historical data and forecast (2015-2030)
Detailed analysis
- Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
- Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
- Key governmental and non-governmental groups or policies that may provide some relief for industry operators.
Financial Benchmarks
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Analyst insights
A labour shortage hikes industry wage costs. Tunnel construction companies are having to pay a premium in wages to retain their talent, which is highly sought after by other ...
In this chapter
- Cost Structure
- Financial Ratios
- Key Ratios
Key metrics
- Profit margin, and how it compares to the sector-wide margin
- Average wages, and how it compares to the sector-wide average wage
- Largest cost component as a percentage of revenue
- Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
Charts
- Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2025
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2025
- Investment vs. share of economy
Data tables
- Liquidity Ratios (2019-2023)
- Coverage Ratios (2019-2023)
- Leverage Ratios (2019-2023)
- Operating Ratios (2019-2023)
- Assets (2019-2023)
- Liabilities (2019-2023)
- Cash Flow & Debt Service Ratios (2015-2030)
- Revenue per Employee (2015-2030)
- Revenue per Enterprise (2015-2030)
- Employees per Establishment (2015-2030)
- Employees per Enterprise (2015-2030)
- Average Wage (2015-2030)
- Wages/Revenue (2015-2030)
- Establishments per Enterprise (2015-2030)
- IVA/Revenue (2015-2030)
- Imports/Demand (2015-2030)
- Exports/Revenue (2015-2030)
Detailed analysis
- Trends in the cost component for industry operators and their impact on industry costs and profitability
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2015-2030)
- IVA (2015-2030)
- Establishments (2015-2030)
- Enterprises (2015-2030)
- Employment (2015-2030)
- Exports (2015-2030)
- Imports (2015-2030)
- Wages (2015-2030)
Top Questions Answered
Unlock comprehensive answers and precise data upon purchase. View purchase options.
What is the market size of the Tunnel Construction industry in the United Kingdom in 2025?
The market size of the Tunnel Construction industry in the United Kingdom is £1.2bn in 2025.
How many businesses are there in the Tunnel Construction industry in the United Kingdom in 2025?
There are 73 businesses in the Tunnel Construction industry in the United Kingdom, which has declined at a CAGR of 0.5 % between 2020 and 2025.
How may import tariffs affect the Tunnel Construction industry in the United Kingdom?
The Tunnel Construction industry in the United Kingdom is unlikely to be materially impacted by import tariffs with imports accounting for a low share of industry revenue.
How may export tariffs affect the Tunnel Construction industry in the United Kingdom?
The Tunnel Construction industry in the United Kingdom is unlikely to be materially impacted by export tariffs with exports accounting for a low share of industry revenue.
Has the Tunnel Construction industry in the United Kingdom grown or declined over the past 5 years?
The market size of the Tunnel Construction industry in the United Kingdom has been growing at a CAGR of 4.6 % between 2020 and 2025.
What is the forecast growth of the Tunnel Construction industry in the United Kingdom over the next 5 years?
Over the next five years, the Tunnel Construction industry in the United Kingdom is expected to grow.
What are the biggest companies in the Tunnel Construction industry in the United Kingdom?
The biggest companies operating in the Tunnel Construction industry in the United Kingdom are Skanska Construction UK Ltd, Balfour Beatty Group Ltd and Strabag UK Ltd
What does the Tunnel Construction industry in the United Kingdom include?
Construction and Maintenance are part of the Tunnel Construction industry in the United Kingdom.
Which companies have the highest market share in the Tunnel Construction industry in the United Kingdom?
The company holding the most market share in the Tunnel Construction industry in the United Kingdom is Skanska Construction UK Ltd.
How competitive is the Tunnel Construction industry in the United Kingdom?
The level of competition is moderate and steady in the Tunnel Construction industry in the United Kingdom.
Methodology
How are IBISWorld reports created?
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Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.
IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.
What data sources do IBISWorld analysts use?
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
Key data sources in the UK include:
- Office for National Statistics
- Office for Budget Responsibility
- Bank of England
Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.
These sources include:
- Industry and trade associations
- Industry federations or regulators
- Major industry players annual or quarterly filings
Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.
How does IBISWorld forecast its data?
IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.
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