Scottish construction industry faces tough times ahead despite growth

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Small to medium Scottish construction firms reported growth at the end of 2016, but there are still many challenges ahead, says FMB Scotland

The Federation of Master Builders (FMB) Scotland has warned Scottish construction firms might be seeing growth but there are still challenges ahead.

The warning was delivered in response to the FMB’s State of Trade Survey. Director of FMB Scotland Gordon Nelson said the latest Scottish construction figures were “encouraging” and show an “underlying resilience” even in the face of numerous challenges.

He added: “Scottish construction SMEs enjoyed a strong end to 2016 with workloads rising in the final quarter as they had in each quarter last year.

“Despite the pessimistic economic forecasts made in the build-up to the EU referendum, these results are encouraging and demonstrate an underlying resilience in a section of the construction industry that has fought hard to recover from the protracted downturn a few years earlier.”

Nelson said the results were undoubtedly positive, particularly in the face of “considerable headwinds” created by the rise of material costs and a chronic skills shortage in the sector.

Construction problems loom on the horizon

At the end of last year, a new analysis from construction and rail recruiter One Way highlighted skills shortages still remain a massive problem, with nowhere near enough new workers entering the industry to keep up with growing demand.

The last quarter of 2016 saw reassuring growth in the UK construction sector on the whole, with November experiencing the fastest pace of growth in activity for eight months. This was attributed to projects delayed following the Brexit vote restarting.

However, the continued increase in the prices of materials is certain to exacerbate problems in the sector. In other research published by Federation of Master Builders earlier this month it was revealed some 70 per cent of builders have seen an increase in the price of construction materials. Small construction firms have been hit the hardest due to the depreciation of the pound—something that is expected to worsen after Brexit is finalised.

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