Scottish building firms had a strong start to the year because they are not over-dependent on overseas workers, says an industry body.
A study for the Federation of Master Builders found construction SMEs with more work was up a net 10% on the previous quarter in Scotland. That compared with a dip of 29% UK wide, the first fall in six years.
Business confidence rises despite uncertainty, says Bank of Scotland
The FMB’s State of Trade Survey for Q1 2019 found:
• UK-wide, SME workloads declined for the first time in six years as more respondents stated lower workloads (29%) compared with the final three months of 2018 (13%)
• In Scotland, there was a jump of 10% compared with the previous quarter. 30% of weighted responses were positive, up from 20% in Q4 2018.
• Skills shortages eased slightly among some occupations. Bricklayers were again the trade in most short supply with 64% of firms having difficulties hiring them.
• A record 88% of SME builders anticipate that material prices will rise further in the next six months.
• Almost three-quarters (71%) of construction SMEs expect wages and salaries to increase over the next six months, up from 66% in the previous quarter.
Gordon Nelson, director of FMB Scotland, said: “It’s encouraging that the Scottish construction industry is bucking the wider Brexit trend with workloads and enquires in rude health. However, the UK-wide picture is very different with the construction SME sector overall detracting for the first time in six years.
"Scotland’s good fortune could be due to fewer EU workers being based north of the border compared with other parts of the country, like in London where one in three construction workers are from the EU.
"Relying less heavily on migrant workers has meant the Scottish construction industry hasn’t fallen foul of thousands of EU workers returning home during the long march to Brexit due to no longer feeling welcome in the UK, or sure of their future here.”
Nelson warned that brewing talk of a second independence referendum could add to business uncertainty.
Work under way on £40m retail and leisure development
He said: “Scotland’s builders mustn’t be complacent as looking ahead, the First Minister has indicated that if the UK does leave the EU later this year, she wants a second independence referendum before the next Scottish Parliament election in 2021. This additional political uncertainty, on top of the continued uncertainty stemming from Brexit, could impact on the construction sector in Scotland.
"The fear is that a looming second referendum could test consumer confidence this year and next. For construction SMEs, this is particularly concerning as their prospects are vulnerable to dips in consumer confidence as so much of our work comes from the private domestic sector.”
