West Midlands based firm Carillion is the second largest construction company in the UK, according to a survey by business advisory firm Deloitte.

It is one of only three UK listings in the top 20 of Deloitte's European Top 100 Construction Companies ranking.

Carillion, whose head office is in Wolverhampton, is listed in 12th position, up three places from last year. It is just ahead of Laing O'Rourke, which took 15th position but behind Balfour Beatty, the only UK company in the top ten in 6th place.

Deloitte ranks the largest 100 European construction companies by revenue annually in its European Powers of Construction report, which this year focuses on the economic challenges the construction industry is facing.

The UK has 27 companies in the top 100 but French firm VINCI leads the pack and is in the number one spot for the second year running. French firms dominate the top ten, with three companies listed.

According to the report a fall in private sector demand and predicted government cut backs are likely to make trading conditions difficult for construction companies in 2010 and beyond.

Chris Robertson, a partner in Deloitte's Birmingham office, said: "It is evident from the financial figures that the recession has not yet fully affected the construction sector.

"Lower levels of growth have been achieved since the slowdown in the housing market, which began to take effect during 2007 and became even more noticeable in 2008. House builders are historically the first to be affected by an economic downturn and this time is no exception but the construction industry as a whole is yet to feel the full impact of the recession.

"Cost containment measures are key as well as effective working capital management. One fear for the industry is that less work will lead to pricing pressures which could lead to unrealistic and ultimately unsustainable pricing in the market."

As a result of the economic downturn, Deloitte expects that construction sector growth in the UK will be largely dependent upon new public sector work and infrastructure spending.