Construction activity tipped to pick up in Scotland this year

NEW research has revealed that an ‘uplift’ in housebuilding and infrastructure spending is expected to boost the Scottish construction sector this year.

The RICS UK Construction and Infrastructure Market Survey showed a net balance of +37% of Scottish respondents expect workloads to be higher in a year’s time, with public and private housing and infrastructure seen as the areas where activity will increase.

This follows on from a slower end to 2019, when a net balance of just +3% of Scottish respondents reported that workloads were rising in Q4. This was below the UK average of +12%. Respondents cited factors including uncertainty over the next stages of Brexit as impacting on workloads.

Skills shortages continue to be a challenge, with 61% of respondents in Scotland claiming to be experiencing a shortage of quantity surveyors, whilst 53% point to a shortage of other construction professionals. Both figures are above the UK average.

Whilst Scottish surveyors expect overall workloads to rise this year, they are less upbeat than their counterparts south of the border. A bet balance of +16% of Scottish respondents expect employment levels to be higher in 12-months’ time, which is half the UK average. A net balance of +13% of Scottish respondents expect profit margins to increase compared to +21% for the UK as a whole.

Commenting on the UK market, Jeffrey Matsu, RICS chief economist said, “The General Election result last month provided a welcome relief to market confidence with the anticipation of additional fiscal spending to be announced at Spring Budget pushing year-ahead workload expectations higher. That said, the yet-to-be-known relationship with the EU has kept the economic outlook fragile which is affecting businesses intentions to invest.”