Scottish construction industry struggle 'continues'

Most surveyors questioned believe a lack of finance is holding the industry back

The construction industry in Scotland has reported a drop in workloads, according to the Royal Institution of Chartered Surveyors (Rics).

The figures for the final three months of 2012 were weaker than many other parts of the UK, which reported an increase in work.

The biggest drop in work was in public sector non-housing projects.

Rics said an increasing number of surveyors in Scotland expected the negative trend to continue this year.

Costs are also continuing to rise, putting pressure on margins.

A lack of finance has been blamed for the low levels of activity.

Sarah Speirs, director of Rics Scotland, said: "After a disappointing few months the sector is still struggling with the continued decline of reported workloads. Critically, competitive pressures in the sector remain intense which is continuing to erode profit margins.

"For the time being financing constraints are still an issue, however, the Scottish government announcement in autumn of an additional £394m being made available for capital building and infrastructure projects in Scotland should aid growth in the sector."

Independence referendum

However, some surveyors said the independence referendum, planned for next year, was affecting business.

David Cation, of Charles Henshaw & Sons, said it was "holding back investment" from the private sector.

Ailsa H McGregor, of McGregor Business Consultancy, said: "The prioritisation and promotion of the Scotland referendum agenda for 2014, further impacts on the business confidence."

The Scottish government said it agreed with Rics that investment in construction was needed to support Scotland's economy.

A spokesman said: "Against the backdrop of a 26% cut to capital budgets by the UK government, we are investing more than £10bn in capital spending in Scotland, building homes, schools and transport projects over the next three years.

"Last month, Finance Secretary John Swinney confirmed the start of work on a £205m package of public construction and maintenance projects, which is estimated to support approximately 2,000 jobs across Scotland in 2013-14 and will particularly benefit the construction sector.

"But we could do so much more if, through independence, we had the full range of economic powers to promote growth, employment and opportunity."