Rail industry leaders predict sector contraction amid ongoing uncertainty, new survey finds

On the eve of the Railway Industry Association’s (RIA) Annual Conference, new polling data from Savanta reveals that 48% of UK rail industry leaders anticipate a contraction in the rail supply sector over the next year. The survey, conducted between September and October among 250 rail business leaders, highlights widespread concern within the industry despite recent government commitments to major rail projects.

The polling results reflect ongoing uncertainty across the rail sector following a politically turbulent year. Importantly, the survey had been conducted before the 30 October 2024 Budget announcement, which outlined new funding for high-profile projects like the High-Speed 2 (HS2) line connecting Old Oak Common to Euston. The Budget also included a pledge for a long-term rolling stock pipeline, aimed at offering more stability and encouraging investment across the rail supply chain.

Survey findings at a glance:

• Outlook on industry growth: Only 26% of respondents foresee growth in the rail supply industry, while nearly half (48%) expect contraction – a slight improvement from 2023’s forecast of 54%
• Business-specific predictions: Despite overall industry concerns, 46% of respondents anticipate growth within their own businesses, with 29% predicting contraction. This is in line with 2023 figures, though it marks the lowest confidence level in five years
• Projected hiatus in rail work: A substantial 83% of industry leaders expect a pause in rail work over the coming year, attributed to potential delays from ongoing rail reform and budget uncertainties around major infrastructure projects
• Planned business adjustments: In response to this anticipated hiatus, many railway businesses plan to freeze or slow recruitment (51%, up from 44% last year), prioritise overseas work (51%, up from 42%), and delay expansion in the UK (35%).

Commenting on the survey findings, RIA Chief Executive Darren Caplan said: “The conclusions of the survey reflect a second year of rail supply leaders being concerned about the outlook for the wider UK rail market and anxiety about their own business’ prospects more specifically. Over 80% forecast a hiatus in work in the year ahead, with a detailed timeline for rail reform or firm commitments for the delivery of major projects still awaited. This uncertainty adversely impacts recruitment, expansion plans and suppliers, who will seek refuge in other sectors and overseas markets if more confidence fails to return.”

RIA hopes that clearer government roadmaps on investments and reform timelines will support the rail industry’s workforce and expansion plans, delivering value to both passengers and taxpayers. The Annual Conference, taking place in London on 6-7 November 2024, will address these issues, bringing together industry stakeholders to discuss the way forward for UK rail development.