Scottish construction SME growth fastest since 2007

The latest State of Trade Survey from the Federation of Master Builders (FMB) found that Scottish SME construction companies are enjoying their fastest growth in workloads and inquiry levels since late 2007.

The sample of 2,000 small and medium-sized enterprise member firms relating to the period between April and June 2015 shows a weighted net balance of 14 per cent of construction companies north of the border enjoyed expansion based on a composite measure of current and expected workloads and inquiries.

This balance is arrived at by subtracting the percentage reporting a fall from that posting a rise, after weighting responses according to the size of company. The reading for the April to June period was up by 10 percentage points on the balance for the preceding three months, and the strongest since the fourth quarter of 2007.

It was, however, adrift of a balance of 21 per cent for the UK as a whole and fears have been raised that business may be unable to cope with the surge in work due to a limited pool of skilled workers.

Gordon Nelson, FMB Scotland director, said: “Following the longest and deepest economic downturn in living memory, it’s very encouraging to learn that construction workloads are increasing and that small firms in Scotland have real confidence that this will continue.

“The results for the second quarter of this year mark the highest for eight years and it feels as though our industry is finally turning a corner.

“While such positive news is both welcome and long overdue, small construction firms are worried that the skills shortage impacting on the construction industry will mean they cannot cope with the increased workloads they are expecting.

“Additionally, there is the real danger that if professional builders, like the ones we represent, are unable to meet the demand for new work, rogue traders may swoop in and hoover up these opportunities.

“This places consumers at risk of poor workmanship and the resulting additional costs and delays in finding a professional builder to rectify and complete the work.

“It’s welcome news that the number of people on modern apprenticeships in Scotland has increased by almost 60 per cent since 2007.

“However, we need to do even more to boost the number of construction apprenticeships – I’m confident that if industry works closely with the Scottish Government then we can aim to beat the new target of 30,000 apprenticeships by 2020. The sooner we address the skills crisis the better.”

The number of respondents to the survey indicating lower workloads fell to 15 per cent, down from 20 per cent in the first three months of the year.