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Civils helps to lift planning gloom

The region is experiencing tough trading as retail, education and housing are hit hard

Despite the start on site of some major transport projects including the M74 completion project and the Edinburgh tram line, Scotland has seen weakening levels in underlying construction activity.

The overall value of underlying projects has decreased as a result of falss in retail and education starts and according to Glenigan analysis, conditions in private housing have also continued to suffer.

The value of underlying private housing starts in the first half of 2009 has been assessed at only a third of the level seen 12 months ago and is now at its lowest in 3 years.

2009 has brought challenging trading conditions to the region. Education starts have improved in the first six months of the year but the value of underlying planning approvals was 24 per cent down on 2008 in the first five months to May.

However, it is not all doom and gloom for Scottish construction. Civil engineering starts continue to create activity in the region and although the numbers slipped slightly in 2008 a number of significant projects saw project starts rise by 48 per cent this year.

Glenigan have also recorded strong performances in the hotel & leisure and education sectors since the start of the year.

The economic downturn and the current contraction in developing projects the value of underlying projects is expected to remain at subdued levels over the next year and a half. Glenigan also forecast that the flow of new projects will decrease in 2009/10.

Private housing starts are also expected to fall back even further and this sharp downturn with undoubtabley affect the prospects for the rest of Scotland’s construction.

However, Utilities look set for some success in 2010.  Scotland’s geographic position makes it particularly attractive for wind farm investment and a number of schemes are in the early planning stages. In addition, Scottish Water is also expected to continue with a strong investment programme.

There is an evident risk that individual schemes may be postponed or cancelled due to the current economic climate and any further deteriorations it may experience. However, there could be a strong rebound in project starts during the last 3 months of 2009 which would lift project starts for the year by barely 10 per cent.

The flow of new projects is forecast to subsequently match 2009 levels next year.

Project Focus: Scotland

Project: Education/Leisure/Civic/Community Development

Client: Renfrewshire Council

Contact: Karen Grady, procurement officer, 0141 842 5051, procurement.tenders.finit@renfrewshire.gov.uk

Value: £350m

Details: The works and services required for this project will include refurbishments and new builds within the following categories; leisure civic, historical buildings & community/care/social. The two year scheme will see work on various sites across across Renfrewshire and the project is expected to last for up to 4 years.

Latest News: It is envisaged that the majority of contracts let under the framework agreement will be full design & build contracts. Applications are currently being invited for inclusion on a select list of framework contractors. The final date for the return of tenders is 6th August, 2009.

By Value

Starts on site and detailed plans approved £m, Dec 08-May 09

ValueStart On SiteDetailed Plans Approved
01/12/2008197.449321.98  
01/01/2009290.037295.561  
01/02/2009382.005403.329  
01/03/2009388.659633.567  
01/04/2009323.183214.22  
01/05/2009334.668196.64  

By Number

Starts on site and detailed plans approved, Dec 08-May 09

ValueStart On SiteDetailed Plans Approved
01/12/20086493  
01/01/20098785  
01/02/20098385  
01/03/200985118  
01/04/20097786  
01/05/20098676  

Top Clients for Scotland

Client NameContracts awarded in
  2009 year to date 
    No of ProjectsValue
(£ million)
  
Department of Health    16947  
Scottish Government    10643  
Airtricity Developments NI Ltd    2306  
Network Rail    5294  
Scottish Power    3201  
Dawn Group    1200  
Gladedale    1150  
Progress Property Company    1125  
Beinn Mhor Power Ltd    1120  
Tullis Russell Co Ltd    1100  

Top Contractors for Scotland

Client NameContracts awarded in
  2009 year to date 
    No of ProjectsValue
(£ million)
  
BAM Construct UK Ltd    5991  
Interserve Project Services    6957  
Robertson Group (Scotland) Ltd    9954  
Morrison Construction    11919  
Laing O’Rourke    1900  
Highways Management (Scotland) Ltd    1320  
Dawn Group    1200  
R J McLeod (Contractors) Ltd    7107  
Balfour Beatty Construction    499  
Carillion Plc    391  

 

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