THE latest Construction Market Intelligence report from Scottish-based construction and property management consultant Rider Levett Bucknall (RLB UK) reveals an ‘optimistic’ outlook for the sector.
The CMI Q1 2025 report shows a slight increase in project starts compared to the previous quarter, with a ‘strong pipeline’ of construction work and projects across the country and ‘significant growth’ in retrofit initiatives.
RLB said the launch of the Construction Pipeline Forecast Tool, developed by the Scottish Futures Trust in partnership with industry and public sector bodies, provides a look forward to anticipated public sector spend within construction and provides long-term visibility into projects, allowing businesses to plan and resource accordingly.
Despite positive developments, the skills gap remains a major challenge. Scotland requires over 26,000 additional construction workers over the next five years to meet industry demands and sustain growth.
RLB’s tender price forecast for Scotland over the next 12 months is for a rise of approximately 3%, with a steady annual rise of 3% expected in 2026 and beyond.
Research found that movements in the cost of materials have been generally in line with trends being currently experienced in the rest of the UK, while the ongoing shortage of skilled labour will inevitably increase pressure on costs.
In terms of sector insights, the commercial property market is being heavily influenced by demand from organisations to provide best-in-class facilities to attract employees back into the office. This, RLB explained, makes quality construction and design all the more important along with stringent monitoring of projects.
Scotland is positioned as a prime location for data centre development, thanks to its clean energy surplus and strong grid connectivity. The sector is said to be experiencing rapid expansion, with competition intensifying to build new infrastructure.
The logistics and manufacturing sector remains a ‘stand-out’ performer in Scotland as rents continue to be competitive compared to other areas of the UK.
Martin McConnell, RLB partner, Scotland, said, “Scotland’s construction sector remains buoyant, with strong performance in key areas such as energy, data centres and manufacturing and logistics. The push for improved housing quality and quantity of housing stock reinforces the positive outlook.
“Whilst underlying material input costs have been easing, the industry has a skills shortage and badly needs investment in skills to replenish the workforce in the longer term. Tender price forecasts remain relatively stable for the short term, but with a latent capacity in the market, any changes in output will likely result in revisions to the tender price forecasts.”
For RLB’s full Construction Market Intelligence Q1 report, click here.
