Small firms ‘taking brunt’ of Scottish construction shutdown


NEW research has laid bare the current cash flow challenges for Scottish construction firms in the wake of Covid-19.

A survey conducted by the Construction Industry Coronavirus (CICV) Forum revealed cash flow has ‘completely dried up’ for nearly 80% of respondents in the sector.

More than half of firms who took part in the new poll also say they’re owed monies from clients, with invoices now overdue.

As a consequence of the pandemic, more than two-thirds of companies who took part in the research say they’ve furloughed staff, with over a third shut completely. More than a quarter currently have staff and sub-contractors in self-isolation.

The survey, carried out between 1 and 14 April, analysed responses from 377 construction companies across Scotland, including electricians, builders, plumbers, surveyors, architects, roofers and joiners.

John McKinney, secretary of Forum members the National Federation of Roofing Contractors (NFRC), the Stone Federation and the Scottish Contractors Group, said, “These disturbing results illustrate very clearly that the construction sector in Scotland is being hard hit, despite the measures that have been put in place to alleviate the pain. It is clearly incumbent on all branches of government and public bodies to step up efforts to expedite payments under the Coronavirus Job Retention Scheme announced by the Chancellor in March. However, there is a danger that even this may be too late for many firms, especially smaller enterprises.

“The same urgency is required for the Coronavirus Business Interruption Loan Scheme, which needs to be fast-tracked. Nearly half of companies which have applied have found the process cumbersome and difficult.”

Respondents called for better information from the UK and Scottish Governments, with requests for greater clarity over what work can be carried out and the financial and commercial implications of the virus.

Fiona Hodgson, chief executive of Forum member the Scottish and Northern Ireland Plumbing Employers’ Federation (SNIPEF), is leading the commercial sub-group of the CICV Forum. She said, “Small construction sector companies are taking the brunt of the shutdown at the moment and many simply do not have the resources to sustain a long period of inactivity.

Fiona Hodgson

“As the CICV Forum survey shows, cash flow is a major issue and fast-tracking of financial support from government will be crucial as this crisis develops.”

The analysis of how businesses are coping is the latest initiative by the group, which is made up of many construction industry bodies including the professions, and which was formed as a direct response to the Covid-19 crisis.

The body now has 16 members, including the electrical contractors’ trade association SELECT, the Civil Engineering Contractors Association (Scotland), the Lift and Escalator Industry Association, the Building Engineering Services Association (BESA) Scotland, the Scottish Building Federation, the Federation of Master Builders, the Scaffolding Association, the Electrical Distributors’ Association, the Builders Merchants Federation, the Royal Institution of Chartered Surveyors, the Royal Incorporation of Architects in Scotland, the British Constructional Steelwork Association, SNIPEF, NFRC, the Stone Federation and the Scottish Contractors Group.