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UK consultancy and engineering firms are experiencing increasing workloads in a buoyant sector according to the latest State of Business report released today by the Association for Consultancy and Engineering (ACE).

During 2006, more than 70% of firms reported growth in workloads. This compares to the 60% of firms reporting growth in 2005, showing that industry performance is improving faster than expectations. The consultancy and engineering sector contributes 10% of the construction industry's £100bn yearly turnover.

ACE chief executive Nelson Ogunshakin said: "The results are confirmation of the critical contribution to the health of UK plc that our sector provides and offer the most accurate, representative picture of the industry. The predicted future growth can only be good news for UK business."

Key results outlined in the report show that the largest and most profitable sector of operation for consultancy and engineering firms is private housing with 75% of firms working in this area. The sector accounts for 20% of consultancy and engineering output. The second most profitable work sector is rail, with one fifth of firms working in this area. The least profitable sectors are private health, leisure and entertainment and public offices.

Sectors of operation vary considerably with the size of the firm. Firms with a turnover of over £10m operate consistently across the majority of sectors, while the smaller firms tend to be concentrated in private housing work and commercial developments. The report also points to the barriers to entry faced by smaller firms coming into certain market sectors, such as roads and rail, where high levels of accreditation demanded by clients can preclude their working as lead consultancies.

Commenting on the report, ACE economic policy and regional director Irum Malik said: "Overall, the ACE State of Business report indicates that construction output strengthening since the start of 2006 has boosted growth in the consultancy and engineering sector, with workload increases in 2006 outstripping 2005 predictions. Clearly the sector continues in good health. The trend for an increase in workloads is consistent across all sectors, with the strongest performers in 2006 being roads, nuclear and rail."