The Federation of Master Builders Scotland yesterday cautioned that a revival in the construction industry north of the border remained fragile.
The group’s new services director Gordon Nelson said it was encouraging to see official UK-wide output showing a 1.5% uplift in construction output in the first quarter of 2014, a figure significantly ahead of the previous estimate of a 0.6% uplift.
However, he said the stats did not paint a full picture of how the sector was performing in Scotland, or the widening skills gap that had opened up since the recession.
“These latest figures are encouraging. They show a continuing recovery in the construction industry across the UK,” said Mr Nelson.
“However, the evidence suggests that recovery in Scotland remains fragile.
“The FMB’s State of Trade Survey is the only survey of its kind of small and medium-sized construction firms.
“This showed a significant dip in activity in Scotland in the first quarter of this year, and the net balance of responses moved into negative territory again.
“The survey has shown positive results for the UK as a whole for five consecutive quarters but for Scotland, over the same period, we have only seen positive results during Q4 2013.
“Many members are reporting rising workloads, though, so we would expect next quarter’s results to be more positive.
“However, there remain significant barriers to further growth, including growing signs of skills shortages.
“The dire state of the construction sector over the past five years has led to many workers being lost to other industries and too few new apprentices being taken on.”
Hot on the heels of positive manufacturing data, yesterday’s new construction figures raise the prospect of a 0.1% upwards revision of UK GDP in the first quarter to 0.9%
If confirmed, the outcome would be the best quarterly rate of growth for the UK economy for almost four years.
Chris Williamson, chief economist at Markit, said the figures suggested the economy was on course for another strong spell of growth in the second quarter.
He said signs of a “booming” construction sector gave further weight to remarks from Bank of England governor Mark Carney this week suggesting an interest rates hike was likely by the end of the year.
Homes for Scotland chief executive Philip Hogg said the interest rate decision was crucial as there were regional variations in the pace of recovery across the UK.
He said uncertainty over interest rates could hit the upturn north of the border.
“The importance that both the Chancellor and Governor attach to the need to increase housing supply is hugely significant.
“But following six years of declining housing output in Scotland and shattered industry and consumer confidence, only now are we beginning to see the signs of recovery with the hugely successful Help to Buy (Scotland) shared equity playing a major role in this.
“There is a wide variation in conditions across the UK, with no signs of an over-heating market or housing bubble in Scotland. Policy-makers therefore need to carefully consider the impact of any changes.”
Scottish Building Federation managing director Vaughan Hart said: “Many of our members are telling us they’re finding it increasingly difficult to find candidates to fill positions at operative and managerial level.
“This problem is further exacerbated by an ageing workforce within the Scottish industry. If we fail to address these issues, a shortage of skilled labour is liable to drive up costs and hamper output. Building companies need additional guidance and support to recruit more apprentices.”