The Scottish Building Federation has renewed calls for additional public investment in the Scottish construction industry as the rate of bankruptcies in the sector continues to climb.

Latest figures from the UK Insolvency Service, published on Friday, show a 17% rise in the number of Scottish building firms going bust during the 12 months to June 2012. In total, 196 construction companies have been forced into compulsory liquidation over that period compared to 75 three years ago.

The new figures follow Scottish GDP figures published in mid-July, which showed the Scottish construction industry had contracted by 6.9% during the first three months of 2012 and UK GDP figures for the second quarter of the year, which showed output from the UK industry having fallen by an additional 5.2% between April and June.


Michael Levack of the Scottish Building Federation said: "Official figures seem finally to be catching up with the harsh reality so many Scottish building firms are currently facing. These insolvency figures suggest that many more construction firms that struggled to survive the previous recession are now hitting the buffers as this second economic downturn really begins to bite.

"That's a real tragedy not only for the individuals affected but for the industry as a whole as we continue to lose jobs, skills and capacity at an unprecedented rate. When the economic recovery finally does come around, we’re stoking up a potentially chronic shortage which will drive up costs and could stymie the delivery of major infrastructure projects.

"Once again, I have to repeat my plea that government at every level takes the action needed to stimulate industry activity – that ranges from tax measures such as cutting VAT on building repairs and improvements to a significant uplift in direct public capital investment and measures to streamline planning and procurement."

(NE)