Shares in Amec, the engineering group, jumped 6 per cent after it said conditions had improved in its North American markets.
The company, one of the few UK-listed engineers with a major international presence, also stands to gain work in Iraq. With its US partner Fluor, Amec has bid for $2bn of work to rehabilitate Iraq's oil fields. The outcome of this tender, which has been delayed three times, is now expected to be announced next month.
In a trading update yesterday, the group was most positive about its North American business, which provides about a quarter of turnover, as clients are expected to start spending on infrastructure again.
"In North America, evidence suggests that the decline in investment in Amec's industrial markets witnessed over the past two years has been halted. Enquiry levels have increased and there has been some resumption of project activity in the mining, forest industry and food and beverage sectors," the company said. "Amec expects to benefit from a number of major contract awards anticipated in its end markets in the first quarter of 2004."
However, it warned that conditions in the US commercial building market "have remained difficult", with its Construction Management division failing to break even in the second half of 2003. Performance in the Earth and Environmental business improved in the second half, "reflecting recovery in US defence spending". Overall, the group said it had met expectations for last year.
Sir Peter Mason, the chief executive, said: "I am pleased with Amec's performance in 2003, with sound progress having been achieved despite challenging conditions in some of our markets.We see improving prospects in our North American industrial markets and are well positioned to benefit when our clients resume major capital investment programmes."
The company said it remained "well positioned" in oil and gas, transport and infrastructure, even though, in the UK, rail maintenance contracts are being taken back in house by Network Rail.
Arbuthnot, the broker, said: "The company is confident for 2004 based on the level of interest in projects but commitments are not yet made so some caution is needed."
Amec shares closed up 14.75p at 267p.