Chief executive John McDonough said the support services arm, which is now the contractor’s biggest business, was on course to deliver a 5% margin this year and strong growth.

He said: “We expect substantial opportunities for growth as we move through 2011 and into 2012 and 2013, as pressure on both central and local government to reduce the cost of public services leads to an increase in outsourcing.”

McDonough said that in the medium term Carillion expected to see “substantial” growth in Canada and the Middle East, doubling turnover in the next three to five years.

Already work wins in Canada had helped to offset planned scaling back of UK workloads from £1.8bn to £1.2bn over the next three years.

In an upbeat trading statement, McDonough said Carillion was on course to deliver its targeted performance after bagging £200m in support services contracts and £60m worth of orders from the financial services sector.

Its Openreach support services contract is also expected to increase by £30m to £145 million, reflecting an increase in scope.

Carillion also revealed today that it had signed a £124m contract to build two 45-story apartment blocks in Dubai.