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Construction sector fears another hard as nails year in prospect

There was mixed news for the UK's construction sector this week. Picture: Getty

There was mixed news for the UK's construction sector this week. Picture: Getty

Industry confidence in the embattled construction sector took a further hit today as a major survey of employers flagged low expectations for jobs and profits.

The Scottish Construction Monitor, published by trade body the Scottish Building Federation (SBF), surveyed some 700 construction firms on a range of key indicators including employment, expected performance of both publicly and privately-funded projects, and repair and maintenance.

It found that the industry’s confidence rating has dropped by nine points since the last quarterly survey and now stands at minus 28, six points below where it was at the beginning of 2011.

Two out of three Scottish building firms predicted publicly-funded construction activity will drop in 2012, and a third expect construction employment to fall.

Most anticipate another difficult year for housebuilding within the private sector, with nine out of ten companies warning that the area would be stagnant or in decline in the next 12 months.

The SBF survey also found that some 60 per cent of employers expect the number of workers and apprentices they employ within their business to stay steady over the next 12 months. More than 30 per cent think the number of people they employ is likely to fall.

Official statistics show that the Scottish construction sector has already lost 30,000 jobs over the 12 months to September 2011.

Last week, 175 jobs were axed at construction firm Donaghy as assets were sold at a company whose clients included major housebuilders Miller, Taylor Wimpey and Stewart Milne.

Repair and maintenance emerges as the sector of the industry with the most positive overall outlook, with more than a quarter of firms anticipating a boost for business in 2012. The picture for publicly-funded construction activity, however, looks gloomy, with almost two thirds of firms predicting output will drop and only 7 per cent expecting activity in this area to go up.

Although expected to perform better than the public sector, private sector construction activity faces limited prospects in 2012, with 44 per cent of employers saying they expect activity to stay the same and 41 per cent forecasting a decline.

SBF chief executive Michael Levack said: “The industry has already lost 30,000 jobs in the space of a year. But with more firms anticipating they will have to make redundancies this year than those hoping to recruit, there’s a real prospect that industry employment levels could drop further yet before they start to recover.

“2012 looks set to be a particularly bad year for public sector construction output, with two out of every three employers expecting the level of publicly-funded activity to fall. That’s a natural consequence of the cuts to public funding that will take effect over the next few years.

“But this survey finds little prospect of the private sector filling that gap, with 85 per cent of firms expecting privately funded activity either to stay constant or to decline.”

 

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