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WSP has seen a slowdown in public sector work in the UK during the second half of the year, which has triggered an 鈥渁ppropriate restructuring鈥� of the engineering group.

Yet it confirmed that the group was trading in line with board expectations and had witnessed a 鈥渟low recovery鈥� in the UK private sector market.

鈥淚n the UK, as expected, we have seen some slowdown in our public sector activities during the second half of the year which has resulted in appropriate restructuring of our business.

鈥淚n the private sector market, where we are well positioned, we have seen a continued slow recovery in certain areas,鈥� it said in a statement to the City this morning.

WSP said that it had incurred more bank debt than expected.

鈥淥ur bank debt was slightly higher than anticipated as at 30 September reflecting liquidity pressures in a number of our markets, although we remain comfortably within our covenants and well financed with a 拢150m committed credit line which runs to 2013,鈥� it said.

WSP generates just over a third of its revenue in the UK, with slightly less coming from mainland Europe 鈥� where 鈥渟ignificantly the largest contributor鈥� is Sweden. The group said that it was 鈥渆ncouraged by the volume of activity across both the public and private sectors and the wider economic outlook鈥� in the Swedish market.

It said that it had seen a 鈥渟trong鈥� performance in Asia and a 鈥渟ound鈥� performance in South Africa, but said it continued to find the Middle East a 鈥渧ery challenging region鈥�:

鈥淸In the Middle East we] remain cautious on the terms being offered for new business. Whilst we continue to complete existing contracts, the progress on legacy debts remains slow,鈥� it said.

In July WSP announced it was shedding up to 50 jobs in its roads business in anticipation of public spending cuts in the sector.