The London 2012 victory has provided a much-needed economic boost to the construction industry, even though there are some concerns about capacity and the vast amount of capital required to deliver the games.
The Construction Products Association said the London bid team put forward a £10bn investment programme. It said the construction bill alone was expected to be £2.5bn.
Shares in companies across the sector rocketed on Tuesday after the announcement. At a time when shares in the sector are outperforming the market as a whole, analyst David Taylor at Teather & Greenwood said it could do nothing but good.
Analysts said the news would benefit quoted companies such as Balfour Beatty and T Clarke, both of which have a lot of work in the Greater London area.
Bridgewell analyst Howard Seymour said: “It will take a while to feed through, and then it will get more specific.”
He identified housebuilder Bellway, which has major land holdings on the east Thames corridor, and Travis Perkins, the builders merchant with a large London presence, as major winners.
He was less convinced about the benefits to contractors: “It is very binary, you either win a contract or you don’t. I would be a bit sceptical about contractors going for big trophy projects.”
It is very binary, you either win a contract or you don’t
Howard Seymour, Bridgewell
Housing regeneration specialists were excited by the news. Tony Pidgley, chief executive at Berkeley Group, said: “You don’t often get me that emotional, but I think it’s fantastic for Great Britain plc, and I hope Berkeley gets a share of it.”
Not everyone in the industry was positive about the win, however. Paul Alcaraz, head of support services at Close Brothers, said that it would distract the industry at a time when it should be concentrating on other areas, and that the sheer volume of money required to make it work was a worry: “It will be a massive distraction from infrastructure, transport, and health and education, which will leave a legacy that is not very helpful.”
Smaller builders welcomed the news, seeing it as an opportunity to pick up surplus work outside the games.
David Brewin, managing director of £50m-turnover Eugena, said: “It’ll mean more opportunities for people like us because the very big contractors will concentrate on the Olympic developments, leaving smaller projects in and around London for people like us.
“I do worry about the skills though - there’ll be loads of people needed.”