‘Decoupling’ of construction jobs and output intensifies

LATEST figures from the Office of National Statistics show that every £1 million of Scottish industry output now supports 13 construction jobs. This has dropped from 22 jobs supported by every £1 million of output in 2004.

The industry employed 168,000 people in the first quarter of 2015, a drop of 8,000 compared to the number of people working in Scottish construction at the end of 2014.

Separate figures published last week by the Office of National Statistics show Scottish industry output hit a new all-time high of £12.5 billion over the 12 months to March 2015.

Based on these figures, the number of Scottish construction jobs supported per £1 million of industry output has fallen from 22 in 2004 to 15 in 2014 and now 13 during the 12 months to March 2015.

Industry output continues to be driven by infrastructure and other public sector new work, which hit a combined record output of £4.3 billion over the 12 months to March 2015. But the value of housing output in Scotland remains 28% below where it was in 2007 prior to the recession. Repair and maintenance output for the 12 months to March 2015 is 19% lower than four years ago.

Scottish Building Federation Managing Director Vaughan Hart said, “Output figures published last week show new record output of £12.5 billion from the Scottish construction industry over the 12 months to March this year. But today’s figures show industry employment fell by 8,000 to 168,000 at the end of that same period.

“As a consequence, every £1 million of industry output generated now supports 13 Scottish construction jobs, whereas the same output value would have supported 22 jobs back in 2004. Productivity is going to be a key challenge for construction and the wider economy in the months and years ahead. In that context, evidence of an increase in industry productivity is to be welcomed.

“That said, to be sustainable in the longer term, the industry’s recovery needs to be suitably balanced across all sectors and this is not currently the case. Investment in training, technology and modern construction methods will be crucial to rebuilding industry skills and capacity and ensuring a balanced and sustainable recovery for Scotland’s building industry.”