Scottish Construction sector has ‘solid foundations’ with ‘steady growth’ expected

The Scottish construction industry is set for steady year-on-year expansion and requires an average 5,700 trades people annually as it continues to benefit from historic highs of infrastructure investment, according to the Construction Industry Training Board (CITB).

CITB Scotland’s latest Construction Skills Network (CSN) report has revealed historic levels of infrastructure investment behind a strong 2014 but warned of the need for the significant numbers required annually to support an ageing workforce.

The CSN report predicts Scotland will see annual average output growth of 1.1 per cent over the 2015 to 2019 period, albeit lower than the UK rate of 2.9 per cent.

It follows a strong 2014 for Scottish construction, during which output grew by an estimated 7 per cent in real terms, a second consecutive year of expansion.

Output growth in Scotland over the next five years is expected to be strongest in the private housing sector at an average annual rate of 5.4 per cent, although this comes on the back of eight consecutive years of decline between 2005 and 2013.

Upcoming large and long-term regeneration projects at Chapelhall near Aberdeen and Grandhome near Bridge of Don, both in the north east, include substantial housing elements.

In infrastructure, while major projects such as the Queensferry Crossing, Borders Railway and M8/M74/M73 improvements are all due to complete during the forecast period, even by 2019 infrastructure output will still be higher than in any year between 1990 and 2012 inclusive in real terms.

Projects in the pipeline include the new £200m Dumfries & Galloway Royal Infirmary, a new campus for the City of Glasgow college, a new Bio-Quarter for the University of Edinburgh costing £32m, and the £48.5m Wick Community Campus.

CITB Scotland attracted 1,434 new apprentices to construction in 2014 – a four-year high – as well as restarting 171 redundant apprentices and this level of recruitment will help support the annual workforce requirement of 5,700 over the next five years. Campaigns to attract former workers back into construction and selling the industry as a viable career option to young people will be ramped up by CITB Scotland in 2015.

Across the UK, a resurgence of growth throughout the regions and nations is driving a strong construction comeback, which is set to create more than 200,000 construction jobs and expand the sector by up to 2.9 per cent, year-on-year.

Phil Ford, CITB’s strategic partnerships director for Scotland (pictured), said: “This latest CSN data shows something of a comeback for construction across the UK, with Scotland making a major contribution.

“Scottish construction enjoyed a strong 2014 with a four-year high of new apprentices and while the main trigger for this, infrastructure, levels out there are a number of promising projects in the pipeline and the prospect of more to be announced, not to mention any new borrowing powers north of the border. With figures for new infrastructure and private housing projects smooth over the period reported it gives us a strong platform to build from.

“The most important role for CITB Scotland in the year ahead is to continue to attract our future workforce, through campaigns to bring people back into construction as well as working with careers advisers to position the industry as attractive to the younger generation.”

Ed Monaghan, CEO Mactaggart & Mickel Group Ltd, chair at construction Scotland and chair of CITB Scotland Advisory Committee, added: “The overall market sentiment is that construction generally has turned the corner with many businesses reporting improved order books and housebuilders enjoying a more active market. All of this has put pressure on the supply chain, in particular skilled labour. It is therefore crucial if the sector is to take full advantage of this growing opportunity that all stakeholders focus their energy on attracting new entrants into construction.”

For the first time since the downturn, the CSN report says that investment boosts in housing, leisure and infrastructure will deliver growth in every UK nation and region, casting aside perceptions of a recovery driven only by the South East.

The annual forecast also predicted that the UK’s private housing sector is set to continue growing at a rate of 4.6 per cent over the forecast period to 2019, with the commercial sector set to grow at the same rate.