A major new survey of Scottish construction industry bosses has found many firms still fearful about industry prospects in 2010.

The survey also suggests that the majority of smaller construction firms are actively avoiding participation in public tenders because the associated costs are prohibitively high.

These findings form part of the results of the latest Scottish Construction Monitor, a quarterly survey of the Scottish Building Federation's membership of more than 700 construction firms throughout Scotland.

2009 was generally recognised as having been one of the worst the building sector has ever experienced, with hundreds of apprenticeship places and thousands of jobs lost and many firms forced into bankruptcy as a result of the recession.

But with many commentators now focused on recovery, the new survey suggests that confidence amongst Scottish construction companies remains very shaky. Almost 80% of those responding indicated they are less confident or no more confident about the outlook for their business over the next 12 months, compared with the past year. Meanwhile, overall business sentiment within the industry remains negative with a combined confidence rating of -20.


At a time when private house-building and commercial property continue to struggle and the industry is more reliant than ever on public sector contracts for new work, the survey also asked SBF members about their experience of public procurement.

The results show less than one in six small building firms (those with an annual turnover below £500,000 and typically employing less than 10 people) have participated in a public tender over the past year.

By contrast, three out of four of the largest firms responding to the survey (those with an annual turnover above £5 million and typically employing at least 100 people) have taken part in at least one public tender during the past twelve months.

The survey also found that those small firms that did take part in public tenders had an average success rate of 71% whereas, on average, the largest firms won one out of every five contracts they had tendered for.

Commenting on the survey findings, Scottish Building Federation Chief Executive Michael Levack argued that the results demonstrated the urgent need for the Scottish Government to tackle the costs and bureaucracy of participating in public sector tenders and streamline the public procurement process.

Commenting on the outlook for 2010 Mr Levack said: "It's clear that the Scottish construction industry remains extremely anxious about what 2010 has in store.

"Recovery in the building sector is likely to be particularly slow. Whatever government money is made available for construction in next year’s budget needs to be fast tracked to the front line so that it has maximum impact on helping the industry to retain jobs, apprenticeships and capacity.

"That being the case, the Scottish Government should act now to streamline the procurement process so that public funding to support the building industry doesn’t end up being drowned in a sea of red tape."

(GK/BMcc)