Reimagining Scotland’s Construction Industry - 2021 and beyond is a continuation of the Addleshaw Goddard Scottish Business Monitor Report – produced in partnership with the University of Strathclyde’s Fraser of Allander Institute – which highlighted significant growth in activity and sentiment within the construction industry earlier this year.

The survey, conducted with 43 firms in the sector, found that in the six months ahead respondents were generally positive about their expectations across several indicators, including turnover and employment levels. Findings also suggested that expected capacity is more positive than Scotland’s economy as a whole.

The survey highlighted that:

• On average, firms expected to operate between 76-99% of normal capacity, with only 10% of businesses expected to fall below 50% of normal capacity.
• Only 6% of businesses in the construction sector expressed that it was unlikely they would survive over the next 6 months, with 82% reporting that it was somewhat or very likely that they would survive.
• While 74% of business reported their cashflow positions were secure or very secure, just over 1 in 5 reported that their cashflow positions were insecure.
• 42% of business said the level of government support has been sufficient or very sufficient, this was a slightly higher share of those who felt support was sufficient than Scotland as a whole (38.5%). 
• 34% of businesses expressed that the level of government support for their business was somewhat or very insufficient for their survival, which was lower than the Scottish average (41%).

The new report shines a light on the current procurement processes which, particularly in the public sector, can have a negative impact on growth in construction given the weighting given to the cost of a job over the quality delivered.

Contributors to the report also highlighted that there are barriers to delivering a more modernised approach to construction, especially in Scotland, because of the political uncertainty surrounding Scottish independence and its future relationship with Europe.

The report however underlines that Scotland has got the tools to modernise construction techniques and processes, deliver more cost and carbon efficient buildings and infrastructure and support a more diverse industry full of green jobs.

Anne Struckmeier, construction and engineering partner at Addleshaw Goddard, said: “Scotland’s construction sector has endured a turbulent 12 months as a result of the Covid-19 pandemic which forced the Scottish Government to request the complete closure of the vast majority of construction sites throughout the first lockdown.

“This had a detrimental impact on the industry nationwide but collectively, the sector is now in a strong position to deliver a more modernised and sustainable approach. This is helped by the Scottish Government’s post-pandemic growth roadmap which is focused on investing in retrofitting existing stock in the built environment. 

“Appetite from private and public sector clients tendering new projects is heavily geared towards supporting the push to meet national net zero targets, and this presents a golden opportunity for the sector to seize and drive forward a more sustainable agenda.

“Improvements, particularly around the use of data and tech, are still needed. However, despite this, the report highlights that the industry seems cautiously optimistic that the rising tide of awareness on environmental, social and governance considerations has the potential to trigger the construction sector’s own green industrial revolution, which is an exciting position to be in.”