Strabag UK is preparing for a significant increase in civil engineering activity as several major tunnelling and infrastructure projects move into full construction over the next two years.
The contractor said activity across its UK operations is expected to accelerate following a temporary reduction in turnover during 2025. Revenue fell from approximately £700m to £600m after delays to elements of HS2 and Anglo American’s Woodsmith mine project affected delivery schedules.
Strabag UK managing director Andrew Dixon said the business now expects stronger momentum from 2027 onwards, driven by infrastructure investment, energy projects and major tunnelling schemes. The company is targeting UK revenue of £1bn by 2028, supported by an order book valued at more than £4bn.
Dixon said: “Demand in the UK construction industry through 2025 did not provide the level of growth that we had anticipated at the start of the year.
“Tenders and awards from preferred bidder status experienced deferment due to client uncertainty caused by higher interest rates and economic volatility.”
Despite the slowdown, Strabag said confidence in the medium-term outlook has strengthened as investment in ageing infrastructure, renewable energy and transport networks begins to progress.
A major part of the company’s future workload centres on the £3bn Haweswater Aqueduct Resilience Programme (HARP) for United Utilities. The scheme involves replacing six sections of tunnel along the 100km aqueduct network that transfers water from Cumbria to Lancashire and Greater Manchester. Main construction activity is expected to begin later this year, with tunnelling and associated civil engineering works forming a substantial long-term pipeline.
HS2 activity has also intensified following the launch of two tunnel boring machines for the final tunnel drive towards Euston. The work is being delivered through Strabag’s joint venture alongside Skanska and Costain, representing one of the most technically demanding sections of the high-speed rail project.
At Anglo American’s Woodsmith potash mine development in North Yorkshire, Strabag’s contract to construct a 37km conveyor tunnel is also expected to return to full production during 2027 after a prolonged slowdown. Momentum on the scheme improved following Mitsubishi Corporation’s agreement to invest in the wider £4.2bn mining project.
Alongside project delivery, Strabag said it has continued to invest heavily in recruitment, training and bid activity to prepare for the anticipated increase in workload. The company is also pursuing acquisitions to expand its technical capability and strengthen its position in sectors including energy and specialist infrastructure.
Recent acquisitions include Stafford-based high-voltage specialist Gunning Transmission & Distribution Services and structural steelwork contractor Crofton Engineering. Both purchases support Strabag’s strategy of broadening its in-house engineering expertise and increasing capacity in key growth markets.
The company is also expected to complete its proposed £59m acquisition of ground engineering contractor Van Elle next month. The deal would add specialist piling, geotechnical and rail infrastructure expertise to Strabag’s UK operations while expanding its capability across major infrastructure programmes.
Strabag said its UK business now serves as the central leadership and administrative hub for all group operations across Britain. Future UK projects will increasingly be delivered through the Strabag UK structure as the wider European group continues to expand its presence in the British infrastructure market.
