The Elite Ayrshire Business Circle

The Elite Ayrshire Business Circle

Tuesday, 19 April 2016

New figures show a slowdown in Scottish construction sector during start of 2016

Slower start to the year, however, growth expectations remain firm

Slowdown in rate of construction workload-growth over past three months

Workloads in the private industrial sector fall for first time since 2012

Growth waning ahead of elections and referendum

Growth in private industrial and infrastructure construction slowed considerably during the first quarter of 2016, according the RICS Construction Market Survey, Q1 2016.

[Pictured: Sarah Speirs, Director RICS in Scotland]

On the whole workloads grew relatively firmly, with a net balance of 18% of respondents reporting a rise in construction activity across Scotland. Construction activity in the commercial and public non-housing segments continued to rise steadily, while a net balance of 4% of respondents reported a decline in activity in private industrial section.

There were positive signs in the housing market, with net balances of 21% and 16% of surveyors reporting growth in activity in the private and public sectors respectively.

Confidence in the outlook for the sector in Scotland also looks positive, with 50% more respondents expecting workloads to rise rather than fall over the next 12 months. This is teamed with a net balance of 39% of contributors expecting employment in the sector to increase over the next year.

Despite the positive predictions for growth in activity and employment, 63% of respondents highlight a shortage of skills as a key barrier for potential growth.

Sarah Speirs, Director RICS in Scotland commented: “Our survey tells us that planning delays and skills shortages are the biggest barriers to growth in the construction sector. Within our manifesto to the next Scottish Government, RICS calls for the introduction of Construction and Planning Skills programmes. These should include building experience within the industry short term and recruiting more people to impact the medium and longer term.”

“That said, there are additional barriers to growth and we cannot discount the climate of uncertainty caused by the forthcoming Scottish Elections and EU referendum. We know that a range of sectors have been affected by these issues as investors look to delay any decisions until a final outcome has been determined, and construction is no exception.”

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