Major projects 'at risk unless the loss of construction jobs is halted'

Published on Sunday 14 December 2008 20:20

MASSIVE public sector building projects – including the new Forth road bridge – could be put at risk if the construction industry continues to contract, the Scottish Building Federation warned today.

The industry body called on John Swinney, the finance secretary, to form a construction task force to address the problem.

Figures published today reveal that 20,000 jobs will have be lost in the Scottish construction industry by the end of the year.

In a separate report out today, property firm CB Richard Ellis predicts that 70,000 homes will be repossessed throughout the UK next year, matching the peak reached in the early 1990s.

Building companies in Scotland – hit by the economic downturn and falling consumer confidence – will have shed 8 per cent of their workforce this year, according to the latest quarterly Scottish construction monitor.

Confidence continues to ebb, the monitor said, with 83 per cent of construction companies indicating they are "less confident" about the outlook for their business over the coming year compared with the past year.

Michael Levack, chief executive of the Scottish Building Federation, said: "Today's results highlight the grave situation facing our industry. Real questions must be asked about Scotland's ability to build the inspirational projects of the future unless urgent steps are taken to keep skilled construction workers employed.

"The collapse in the housing industry coupled with the slowdown in public sector work has reduced confidence in our sector to a new low.

"Employers need to know that there will be work in 2009 to allow them to keep staff numbers at the current level."

Some 220,000 people work in the Scottish building sector. A spokeswoman for the Scottish Government said: "John Swinney will be meeting the Scottish Building Federation this Wednesday and will discuss these issues directly with Michael Levack then.

"We recognise the pressures the construction industry is under, which is why the Scottish Government's six-point economic recovery programme identified the need to bring forward capital expenditure projects to stimulate the economy."

Meanwhile, a report by CB Richard Ellis indicated that, for every additional 500,000 people sacked, the number of home repossessions could rise by 20,000.

Jamie Doran, associate director at CB Richard Ellis Scotland, said: "Lenders passing interest rate cuts on to homeowners will help, particularly those coming off fixed rate or tracker mortgages, but even that cannot make up for the loss of an income in highly-geared households."

CB Richard Ellis said fewer than 70,000 homes may be repossessed if UK government intervention is successful.