Optimism growing as builders prepare to hire staff

Bosses continue to express concern over skills shortages within the construction industry. Picture: AP

The findings of the latest Scottish Construction Monitor will provide a boost for a sector laid low by the economic downturn, when thousands of workers lost their jobs and a string of building firms went bust. However, bosses continue to express concern over skills shortages within the industry.

The quarterly survey of the membership of trade body the Scottish Building Federation (SBF) shows industry confidence dipped compared with the second quarter of the year – possibly due to uncertainty over the independence referendum – but remains positive overall.

It found that 42 per cent of businesses expect to take on more workers over the course of the next three years. But the report notes that a reduction in industry employment in recent years combined with an ageing workforce will continue to pose challenges as the industry recovers from the recession.

The SBF estimated that the average age of workers employed in the construction sector is currently 40.

Vaughan Hart, managing director of the SBF, said: “These survey results confirm the general decline in employment the industry has experienced over the past three years. More encouragingly, they point to growing expectations that employment will begin to recover over the next three years.

“At the same time, there’s evidence that Scotland’s construction workforce is ageing. With apprentice numbers down significantly on where they were prior to the recession, this situation is entirely understandable. But it has to be a cause for concern as we seek to re-build capacity. Attracting new blood back into the industry must be an absolute priority.”

The survey – based on responses from 76 construction firms between 29 August and 17 September – saw 45 per cent of employers report a reduction in their workforce during the past three years against 37 per cent who said their headcounts had increased during that time.

But just 5 per cent of businesses expect the size of their workforce to reduce during the next three years, against 42 per cent flagging an increase. The remaining 53 per cent forecast no change.

Hart said: “We’ve seen a decline in confidence this quarter but employers continue to be optimistic about future prospects for their business overall. I think general uncertainty created by the referendum may have had a dampening effect on confidence this quarter. I would expect to see industry confidence rebound next quarter.”

The SBF survey is published ahead of this week’s latest purchasing managers’ index for the UK construction sector. Economists expect it to indicate that activity remained strong in September, although the rate of expansion is likely to have edged back from August, when it touched a seven-month high.

Howard Archer, chief UK economist at forecasting group IHS Global Insight, said: “The prospects currently look healthy across construction sectors.

“Extended improved economic activity and largely healthy business confidence should underpin commercial construction activity and civil engineering, while infrastructure spending appears to be picking up.”