By Scott Wright
AN upsurge in public works, in sectors ranging from energy and communications to road, rail and residential, has helped slow the rate of decline in Scottish infrastructure and construction activity.
But overall workloads continue to be held back by weak commercial activity, amid challenges brought by the structural changes taking place in the retail and office markets.
A picture of recovering workloads has been underlined by the latest RICS (Royal Institution of Chartered Surveyors) Construction and Infrastructure Monitor, published today.
The new report found a workload balance for Scotland of -11 in the fourth quarter of 2020, which compares with -18 in quarter three and -43 in quarter two. The latter period reflected the aftermath of the move into the first national lockdown in March last year, which resulted in virtually all activity grinding to a halt.
The report signals that workloads improved in the last three months of the year despite continuing concerns over the pandemic, and the rise in cases as the UK was gripped by new, more transmissible variants of the coronavirus.
Driving activity were modest rises in workload balances for public housing, infrastructure and other public works. However, this came at the same time as steep falls in private commercial and private industrial workloads. The private housing workload was flat, according to the report.
In terms of outlook, a net balance of +27 of Scottish respondents said they expect workloads to be higher in a year’s time, though only +6% expect employment numbers to rise.
Alistair Mccracken of Reid Associates in Glasgow said: “Delays getting statutory consents are affecting construction activity, as well as design teams furloughing staff.”
Chris Shields of TCS Construction Consultants in Kilmarnock said that material shortages and longer lead in times were impacting on workloads.
The RICS report for the UK found that housing activity has been boosted by government measures such as the temporary cut to stamp duty (land and buildings transaction tax in Scotland) and the extension of help to buy. It expects the market to remain “resilient” this year despite stimulus measures either expiring or tapering off in the coming months.
The UK report found activity in sectors such as energy, communications and transport helped the infrastructure report the strongest uptick in workloads. It resulted in the survey recording a UK workload balance of +26 for the infrastructure sector, following readings of +3 in the third quarter, and -17 in quarter two.
At the same time, workloads were found to have increased in the UK residential sector, although the report said the readings were “still relatively modest”. Within the residential sector, readings of +12 were recorded for the public sector, and +10 for private housing.
A negative balance of respondents (-8) said they expect profit margins to continue to be squeezed, though this was less negative than at any point in 2020.
Commenting on the UK picture, RICS chief economist Simon Rubinsohn said: “This latest RICS data shows the positive impact that stimulus packages can have on the sector and the wider economy. It is now critical the government continues to focus on delivering on its ambitions around ‘levelling up’ and ‘net zero’ while building a sustainable economic recovery using the forthcoming budget to embed these goals. Green infrastructure, which has an important role to play in supporting this approach, needs to be at the forefront of the priority list. Although skill shortages appear to have diminished importance as a constraint in output according to the survey, our suspicion is that this reflects the current environment and is likely to re-emerge as the industry gears up over the next few years. It is thus important that a focus remains on promoting training and development across the sector to build capacity to address future challenges.”
Meanwhile, the Royal Incorporation of Architects in Scotland (RIAS) is on the hunt for a chief executive, its first for some time. The post has been created to support the profession at what RIAS said is a time of significant change. The new chief executive will be based at the RIAS headquarters in Edinburgh.
RIAS president Christina Gaiger said: “There has never been a more challenging time for our members. However, it is also a time of enormous opportunity to collaborate, upskill and explore new technologies that will help us to play our role in addressing the biggest challenge of our time – the climate emergency.
“Our members are influencing change across the country through their work with national and local government, businesses and communities. We are determined that they should have a Chief Executive who can help to ensure that their voices are heard and that we are able to use our skills and experience to transform the built environment and support Scotland’s low carbon targets.”
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