Scottish construction industry output ‘to contract 0.6 per cent over next five years’

The prediction was made as the CITB revised its overall UK output forecasts due to the Brexit vote.

The organisation is anticipating output will average 2 per cent per year until 2021, down from 2.5 per cent in January at the beginning of his year.

In addition, a period of limited growth and a small contraction of -0.2 per cent is anticipated for the remainder of 2016 and 2017.

However while output stutters, the CITB said it is a varied picture across the country. Wales’ average growth rate is expected to remain above average at 5.7 per cent, with England, the South West (2.8 per cent) and North West (2.2 per cent) present the strongest regional outlook.

However, in addition to the Scottish sector declining, over 1,800 new workers will be needed each year for its industry.

The biggest shift in forecast is for the Greater London region, with growth falling from the 3.5 per cent predicted in January to 1.5 per cent.

Stephen Radley, director of policy at CITB, said: “Our new figures reflect the increased uncertainty in a Brexit-facing world. While construction’s slowdown cannot be solely attributed to the result of the vote, it has certainly intensified and hastened any decline in growth.

“Recently trading conditions have become more difficult, and margins are being further squeezed. But Brexit has introduced an unprecedented number of unknowns and construction is beginning to feel the repercussions.

“While on the whole the outlook has worsened, we do need to keep some perspective. The economy is bearing up reasonably well in the wake of the uncertainty and construction has a healthy programme of major projects and infrastructure works in the pipeline. Projects such as Hinkley, Wylfa and HS2 will undoubtedly buoy up the sector in the medium term.

“However, delays and uncertainty over investment decisions and access to migrant labour will likely intensify as Brexit nears. While employers’ main focus in the short term will be to weather the storm, it’s also important that they equip their workforce with the right skills for the challenges ahead.”