This month’s Scottish Construction Monitor, a quarterly survey of the Federation’s membership of more than 700 individual construction firms, shows overall confidence within the sector has declined for the fifth consecutive quarter.
The industry confidence rating now stands at MINUS 45, 24 points below where it was at the start of the year.
More than 60% of firms responding to the survey report a reduced order book compared to the same time last year, while almost 80% predict that industry activity will decline in the course of 2011.
Consequently, almost two thirds of firms expect that they will have to reduce the size of their workforce next year, with only 5% of respondents expecting to be in a position to take on additional workers.
According to official figures, the industry has witnessed some modest signs of recovery in the course of 2010, with total direct industry employment reportedly climbing back up to 187,000 in the third quarter of 2010 from a low of 156,000 at the beginning of the year.
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However, this new survey suggests that the construction industry’s recovery is at risk of faltering and, over the coming months, there are strong fears that industry output and employment could slip back into decline.
Extrapolating the survey results and applying them to the Scottish industry as a whole, the Scottish Building Federation has warned that, if its members’ predictions are correct, more than 11,000 Scottish construction jobs could be lost next year, while output from the industry could reduce by more than £600 million.
Commenting on the survey results, Scottish Building Federation Chief Executive Michael Levack said: “Overall, as 2010 draws to a close, I think the mood amongst construction firms is very apprehensive. With the value of new orders apparently shrinking, with Scotland’s public capital budget facing a cut of more than 20% next year, and with many other sectors of the industry – not least housebuilding and commercial – continuing to struggle, our members are bracing themselves for tough times ahead.
“Over the coming weeks, MSPs will be negotiating the details of the Scottish budget for next year. I would urge them to take careful heed of this warning from construction industry bosses.
“To give the industry a more positive outlook, additional public money must be prioritised towards capital investment. Banks must also be put under pressure to show greater commitment to the sector and to start easing the availability of affordable credit to help firms get new projects off the ground. And we must do more to help keep apprentices in the industry gainfully employed and able to complete their training.”
Mr Levack concluded: “I will be urging our politicians to make positive progress on all of these fronts in the early part of 2011. To have any hope of delivering a sustainable economic recovery next year, we simply cannot afford to let the building sector slip back into decline.”
(GK)
