Glenigan: Construction activity in Scotland the fastest growing in the UK

During the summer months, the Scottish Construction Monitor reported that the rise in confidence – so evident in the three previous surveys – had dropped-off. And yet, according to Glenigan, fears over future job prospects might be “misplaced”.

August 2017 saw the value of underlying project starts in Scotland skyrocket 29% – the single biggest rise in any region of the UK – and this trend looks set to continue. “Indeed, the data reveals construction activity in Scotland is growing faster than anywhere else in the UK,” confirmed Allan Wilen, Economics Director at Glenigan.

“Levels of public sector construction spending remain high in Scotland compared to England. We expect activity to accelerate towards the end of this year as greater economic certainty should support growth in the nation in 2017, even if the commercial sector is less buoyant than it was a couple of years ago.”

Here, Glenigan identified large-scale infrastructure projects – the £745M Aberdeen Western Peripheral Route (AWPR), for instance – as the root cause, citing their mammoth contribution to Scottish construction output.

Earlier in the year, Scottish Building Federation President Stephen Kemp gave a fairly pessimistic appraisal however: “There is a feeling that the underlying fundamentals of the industry are not nearly as strong as record output figures might suggest. We know that a period of record output from major infrastructure projects such as the AWPR and the Queensferry Crossing is about to come to an end. Strip away those numbers and the performance of other key sectors of the industry such as housing and private commercial don’t look that strong.”

He’s not wrong. ONS data for the first half of 2017 showed that growth in both the public and private residential sectors had slowed. But Glenigan has taken into account new project starts and the findings suggest a spurt in construction output over the coming weeks and months. “There has been a strong rise in industrial project starts so far this year in Scotland and starts are up in eight out of the 11 sectors monitored by Glenigan,” said Mr Wilen.

As high-profile infrastructure projects – most recently the landmark Queensferry Crossing – draw to a close, new projects rise to take their place. Transport Scotland has planned a £3Bn improvement programme, for example, which will upgrade the A9 between Perth and Inverness and boost output even further.

The outlook is far greener than some would have you believe and, with a groundswell of schemes in the works, that trend looks set to continue.

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