Sector in rude health, says report

Housebuilders ‘resilient’ but fearful over labour

Housebuilding: growth is buoyant but the sector is behind target

Scotland’s housebuilding sector is becoming increasingly resilient though growth remains below target and is threatened by skills shortages, according to a new report.

Consolidation, greater collaboration and a focus on innovation and skills development appears to be paying off for the sector with industry leaders cautiously optimistic about short to mid-term prospects.

However, the 16,000 homes built on average in Scotland each year is below the pre-crisis total of 21,000 and may struggle to meet the Scottish Government’s target of achieving 50,000 affordable homes by 2021.

Construction continues to support more than 60,000 jobs – both directly and indirectly – and the industry is also playing a leading role in tackling youth employment.

But, while the mood in housebuilding is buoyant, there are concerns that recession fears, led in-part by a potential Brexit-led consumer downturn, and a shortage of skilled labour, could create challenging conditions for businesses focused on long-term growth.

The data from Grant Thornton confirms recent bullish reports from a number of housebuilders who say demand remains high, though they fear the prospect of labour shortages, particularly if there is a slowdown of EU immigrants.

Chris Smith, property and construction executive at Grant Thornton in Scotland, said: “Scotland’s housebuilding sector endured some of its biggest challenges during the downturn of 2009, but it appears to have now emerged from the crash, stronger and more resilient than ever.

“The recent £655m acquisition of Miller Homes is just one example of the recent flurry of activity.

“But Brexit undoubtedly raises some fears that a nervous consumer market could lead to a dip in sales and ultimately a slump in the housebuilding market.

“For the time being, the sector seems to be in rude health and focused on resilient, sustainable long term growth.”

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