Building firms 'growth' despite setbacks

Hundreds of people have lost their jobs following the collapse of a number of building firms in Scotland

Scottish construction firms have experienced strong growth despite "significant headwinds", according to the Federation of Master Builders.

Hundreds of people have lost their jobs in the building trade in the last few months, following the high-profile collapse of a number of firms.

But the FMB found small firms' (SMEs) performance rose by 17 percentage points in the second quarter of 2018.

The trades association praised the resilience of the sector.

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Gordon Nelson, the director of FMB Scotland, said: "The second quarter of this year carried a lot of bad news for the Scottish construction industry with the loss of hundreds of jobs after some well-known firms collapsed.

"However, beneath these headlines, the outlook for most small construction firms has remained relatively bright.

"The positive reports from construction SMEs in the first quarter of 2018 have not only been sustained into the second quarter, they have improved significantly.

"This performance is all-the-more remarkable considering the serious headwinds facing the sector."

A total of 325 construction SMEs responded to the UK-wide survey conducted by Experian for the FMB.

It considered workloads, enquiries and expected workloads its main indicator for the performance of Scottish construction firms.

Construction firms have reported a shortage of skilled bricklayers, plumbers and carpenters

The study found that performance had jumped to its highest point since the first quarter of 2017.

However, it also found that more than three quarters of builders expect material costs to continue to rise.

Many firms are finding it difficult to recruit skilled tradespeople, including carpenters, plumbers and bricklayers.

Mr Nelson described the construction industry as "highly resilient" but he warned that the "economic uncertainties" of Brexit loomed.

He issued a warning to the Scottish government over the "unintended consequences" of its latest policy proposals.

Exacerbate delays

He also raised fears that small construction firms with offices and storage facilities on the outskirts of towns could be hit by a new tax on out-of-town businesses.

He added: "In addition, many builders are concerned about the direction of the Planning Bill with an amendment on third party, or 'equal', right of appeal expected to come forward.

"If this does emerge, it would exacerbate the current planning delays experienced by builders and heap significantly more risks upon their businesses.

"Small construction firms are the backbone of what is a key industry for Scotland's economy. The Scottish government must make sure it is not unintentionally shackling them."

The Scottish government said no final policy design decisions have been taken on the Barclay Review on business rates.

A spokesman said: "We are seeking views on a possible pilot scheme which would run in up to three council areas in which businesses based out-of-town might be charged a modest supplement on their rates to support town centres.

"As part of this consultation we welcome all views and will consider all submissions very carefully before reaching any decisions.

"We share FMB Scotland's concerns about any proposal to allow third parties to appeal planning decisions.

"The changes set out in our Planning Bill are designed to involve people more meaningfully and at a much earlier stage of the planning process, rather than add more appeals, more conflict and more delay at the end."