A MAJOR fall in big infrastructure projects led to a £1.5 billion drop in output by the Scottish construction sector in the third quarter, causing employment numbers to plummet by 5,000.
The Scottish Building Federation has said that a
£300 million rise in output from the housing sector failed to offset the reduction in output from infrastructure, public sector new works and the private commercial sector. The result was that the value of output from the construction industry fell from more
than £15.5bn in the 12 months to September 2017 to less than £14bn one year later, the federation said.
Vaughan Hart, managing
director of the federation, said: “While it’s encouraging to see an increase in output from the housing sector over the past 12 months, other sectors of the industry are faring less well.
“We’ve known for some time that, with the conclusion of major projects such as the Queensferry Crossing and the Aberdeen Western Peripheral Route, infrastructure output was going to decline.
“A 32% drop in other public sector works is an indication of continuing pressure on local government budgets.
“A 23% fall in private commercial work is worrying evidence of the negative impact of continued uncertainty around Brexit on investment appetite.”
The industry body noted that its figures coincide with difficulties
at infrastructure giant Interserve, which has seen its shares plunge after revealing it as been holding talks with lenders over its £500m debt.
Mr Hart reiterated the call made by his organisation after Carillion collapsed at the start of the year for public procurement practices to be reformed “to ensure construction SMEs get further and fairer access to public sector opportunities”.
He added: “A well as being good for those smaller businesses, this approach also spreads the risk for contracting authorities.”
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