How is the construction industry performing in Scotland?  – Scottish Business News

SCOTLAND has faced many challenges in recent years. From the impacts of the coronavirus pandemic to increasing inflation driving the cost of living crisis, there is a lot of economic uncertainty afoot. 

So how exactly has this impacted construction industry performance across the country? Here, we take a deep dive into the report issued by the CITB (Construction Industry Training Board) to find out.  

What impact did COVID-19 have? 

The coronavirus pandemic had a significant impact on the construction industry in Scotland. Output dropped considerably from over £14 billion in 2019 to just over £12 billion in 2020. This sharp decrease in production mirrors the drop experienced during the 2007-08 financial crisis. 

According to CHAS, “the majority of construction businesses” were “hit hard” by COVID-19. They surveyed nearly 900 business owners about how the pandemic affected them and their profitability.  

They found that construction companies were heavily affected by “trade and travel/transport restrictions, increased operating costs and a significant decrease in demand.” Many had to cancel or postpone projects which ultimately affected their bottom line.  

What can we expect for construction going forward? 

Post-pandemic, we have seen a steady increase in output as the industry recovers. While the report states that the remainder of 2023 and 2024 are predicted to be tough for construction, a 1% increase in total work is expected between 2023 and 2027. 

This will increase demand for many companies across the sector, from PPE distributors and project managers to temporary modular buildings for hire on construction sites. They say that an “extra 19,550 workers will need to be recruited from 2023 to 2027” to meet requirements.  

What are the main sectors in demand? 

The data set shows that the construction industry in Scotland has some key differences from the rest of the United Kingdom. Infrastructure work is the biggest sector, making up 22% of the overall output for the country. For the rest of the UK, this sits much lower at 15%. 

In Scotland, infrastructure is closely followed by private housing and non-housing repair and maintenance work, both at 20%. Housing repair and maintenance sits in fourth place, providing 13% of the total output. 

Interestingly, industrial work is at the other end of the scale, making up only 3% of the industry structure. Public housing sits at 5%, while commercial projects make up 10% of the total. 

Are these sectors forecasted to grow? 

Many of these sectors are expected to grow between 2023 and 2027 in Scotland. Industrial work is forecasted to have the biggest increase in output, at 2.6% over the five-year period. This is closely followed by the commercial sector at 2.2%.  

Growth in other areas is smaller, with private housing expected to increase by 0.9%, infrastructure by 0.8% and public housing by 0.2%. The only sector expected to decrease over the next few years is housing repair and maintenance, which is forecasted a 0.1% drop. 

The overall increase in construction output will be beneficial to the county as a whole, helping to improve the economy and provide more jobs for workers.