Scottish construction sector displays ‘cautious optimism’ despite fall in output



The UK construction industry has witnessed the first year-on-year contraction in output since May 2013 following a sharp dip in August, according to new figures from the Office for National Statistics (ONS).

Total construction output for the month dropped by 3.9 per cent on the previous month, with all sectors except public new housing reporting falls.

The contraction means August’s output is now estimated to have fallen by 0.3 per cent on the same month in 2013, the first year-on-year fall for 14 months.

However, the ONS noted that a revision to the data for July, from 0 per cent to 1.9 per cent, had an impact on the month-on-month contraction in growth.

All new work decreased by 4.8 per cent, with all types of work except public new housing reporting decreases; infrastructure (6.5 per cent); private commercial (5.6 per cent); private housing (5.5 per cent); private industrial (4.9 per cent); and public other (2.4 per cent). However, the fall in private housing provided the largest contribution to the overall fall in all new work and all work.

Repair and maintenance (R&M) also fell in August 2014 (2.5 per cent), notably non-housing R&M fell by 2.6 per cent.

Ed Monaghan
Ed Monaghan

Ed Monaghan, chair of Construction Scotland, said he remains cautiously optimistic despite the dip in ONS construction stats.

He said: “It is disappointing that the figures released by ONS today show a slight dip compared to recent months, however I don’t believe that those within the construction industry in Scotland should be concerned. It is my belief that the future remains bright for the industry.

“I was able to witness this buoyancy and optimism here in Scotland just this week at Construction Scotland’s annual conference, where over 300 delegates from all sectors of our industry joined us to focus on innovation. Just as important as the high-profile speakers who joined us at the event was the call to action from our now officially launched Innovation Centre which is seeking to engage with organisations of all sizes in order to assist them make ideas and innovative projects become reality – and it’s this innovation and forward thinking which doubtless will be key in contributing to our sector’s continued success in the short, medium and longer terms.”

Brian McQuade
Brian McQuade

Monaghan’s sentiment s were echoed by Brian McQuade, managing director of Kier Construction’s Scotland & north-east England business, who said: “Although today’s statistic have shown a slight dip, compared to previous months, we believe that there is still every reason to be positive about the future of the Scottish construction industry.

“The statistics do not reflect the trends that we are experiencing at Kier. Only a few weeks ago we were delighted to report that we have increased revenue by more than 50 per cent to £3bn for the year ended 30 June 2014.

“We have won a number of significant new contracts in Scotland, both in the private and public sectors, and the net result is that we are creating new jobs to cope with the increasing workload including middle managers, senior commercial staff, and construction project managers. Through our subcontractor programme, we are also committed to providing local jobs to local people.

“We are obviously delighted with our healthy order books and the sustainable growth that we are experiencing, and we are sure that the trends we are seeing will be reflected in future ONS publications, confirming that there is indeed a bright future ahead for construction in Scotland.”



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