NEARLY four times as many construction companies in Scotland fear Brexit will be negative for the sector as expect it to be positive, a survey has revealed.

The Scottish Building Federation’s latest quarterly monitor shows 33 per cent of construction firms believe the UK leaving the European Union will have a negative impact on the sector north of the Border. Only nine per cent expect the impact to be positive, with 16 per cent seeing no effect.

Meanwhile, 42 per cent of Scottish construction firms declared they were unsure about the impact of Brexit on the industry. And 40 per cent of construction companies north of the Border said they did not know what impact leaving the EU would have on their business.

Vaughan Hart, managing director of the Scottish Building Federation, said: “Ongoing uncertainty on the political and constitutional fronts is making industry employers feel quite nervous about the future outlook.”

He added: “Our general message to government and to politicians across all parties continues to be that the more certainty and stability they can provide, the more confident construction industry employers will feel and the stronger position they will be in to boost employment and to generate output that benefits the economy as a whole.”

In spite of still-fragile confidence and firms’ specific worries over Brexit, Scottish construction companies have been in recruitment mode over the past 12 months and are signalling continuing growth in the sector’s overall workforce in the coming year.

About 43 per cent of Scottish construction firms said their employee numbers had risen over the past 12 months, while 20 per cent reported a decline in staffing. The remaining 37 per cent saw no change in the size of their workforce over the period.

Meanwhile, 41 per cent of construction companies north of the Border expect the size of their workforce to increase over the next 12 months, while only 14 per cent believe they will have to reduce employee numbers.

The employment outlook for the sector as a whole is more negative on a five-year view, with the proportion of companies expecting the overall Scottish construction workforce to fall over this timeframe slightly greater than that projecting an increase.

About 19 per cent of Scottish construction companies expect overall sector employment to decline over the next five years, while 17 per cent project it will rise.

About one-third of firms expect the Scottish construction workforce will remain flat over this five-year period, at around 175,000, while the remaining 30 per cent are unsure about what will happen to employment in the sector over the next five years.

The confidence reading in the Scottish Building Federation’s latest quarterly Scottish construction monitor is +2. This is the third consecutive quarter in which a confidence reading of +2 has been recorded.

Construction companies are asked to rate how confident they feel about the prospects for their business over the next 12 months, compared with the past year.

The confidence reading plunged to -19 at the end of June last year, in the immediate wake of the UK electorate’s vote to leave the EU.

About 58 per cent of respondents predict fragmentation and a trend towards more self-employment within the construction sector will have a negative impact on their business.

Meanwhile, 67 per cent of Scottish construction firms believe that an increase in public funding for housing will have a positive impact on the industry as a whole.

About 59 per cent fear that the growth of project management companies, and a trend towards outsourcing labour rather than providing direct employment, will have an overall negative impact on the Scottish construction sector.

Mr Hart declared that recent signs for the sector had been positive, with strong output and rising employment.

However, flagging the political uncertainty, he added: “Looking at this latest set of results, there is a real sense that the industry remains stuck in a state of limbo just now.”