Construction sector reverses positive trend

Confidence slips on worries over new work

Queensferry Crossing
Queensferry Crossing

Building companies are concerned that no new work will be available to fill the gap left by the completion of major projects such as the Queensferry Crossing and the Aberdeen Western Peripheral Route.

A potential gap in workloads has contributed to a fall in confidence across the Scottish construction industry.

After three positive quarters the latest Scottish Construction Monitor has slipped into negative territory.

Stephen Kemp, president of the Scottish Building Federation which compiles the monitor, said: “Many building employers are increasingly nervous about the future prospects for our industry.

“There is a feeling that the underlying fundamentals of the industry are not nearly as strong as record output figures might suggest.

“We know that a period of record output from major infrastructure projects such as the AWPR and the Queensferry Crossing is about to come to an end. Strip away those numbers and the performance of other key sectors of the industry such as housing and private commercial don’t look that strong.

“As that infrastructure work dries up over the next year or so, we could see the industry suffer a real shock. Levels of industry employment, which have been very slowly recovering, could slip into reverse. I think that is what SBF members are now worried about – hence the reason why industry confidence has declined.”

Mr Kemp, who is also managing director of Orkney Builders, added: “In reality, the local community and economic benefits provided by these large infrastructure projects are limited.

“To ensure the long term health of the construction industry and the wider Scottish economy, the Scottish Government now needs to focus on supporting smaller scale projects throughout Scotland.

“Such a strategy will help to sustain building SMEs that are the real drivers of employment and economic added value in Scottish construction. Without this, we could be facing a cliff edge that tips the industry – and the wider Scottish economy – into recession.”

William Gray, a director of the SBF, said: “Streamlining the planning and building control process would help, as would increasing staffing so they can make decisions more quickly.

“One solution would be to change the rules so rates don’t need to be paid on new industrial buildings until they actually have a tenant, as speculative building is now at an almost complete halt.”

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