Construction sector brushes off fears over Brexit

The Scottish construction sector expects to regain ground lost following the UK's vote to leave Europe, with growth forecast in workloads, employment and profit, according to new data published today.

Rics said that builders have 'shrugged off concerns about the effect of Brexit'. Picture: Contributed
Rics said that builders have 'shrugged off concerns about the effect of Brexit'. Picture: Contributed

In its survey of the construction market for the fourth quarter of 2016, the Royal Institution of Chartered Surveyors (Rics) found expectations of output growth over 2017 strengthened following a dip after the EU referendum.

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Workload growth expectations improved from +7 per cent in the third quarter to +27 per cent in Q4, and 20 per cent more survey respondents said they expect a rise in employment this year.

The survey also found modest growth in the Scottish construction sector in the final three months of 2016 – 7 per cent more respondents reporting growing workloads.

The private industrial sector is seen to be driving growth, as 23 per cent more respondents reported an increase.

Private commercial and private housing also increased between September and December, but public non-housing works fell in the same period.

Respondents warned of skills shortages restricting growth, despite easing in five consecutive reports, with half of those surveyed pointing to a lack of quantity surveyors.

Stephen Daniels, director of construction consultancy MB Langmuir & Hay in Glasgow, said labour shortages are affecting projects, which is resulting in delays.

Simon Rubinsohn, Rics chief economist, said: “The latest results suggest that the construction sector has shrugged off concerns about the effect of Brexit with key workload indicators remaining firm around the country.

“That said, there remains some unease about access to skilled labour in the emerging new world and financial constraints still remain a major challenge for many businesses.”

The Scottish Building Federation said last month that confidence among construction employers north of the Border held steady at +2 in the last three months of 2016. This marked the second quarter in a row when the overall confidence of the industry was rated positive after a slump to -19 right after the Brexit vote.