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Scotland bets on transport

The Scottish construction industry has seen the benefits of several major transport projects, including the M74 completion project and the Edinburgh tram line.

But these schemes have not been enough to save the region from weak activity in underlying construction.

Furthermore, the value of underlying planning approvals, a leading indicator for construction activity, fell by 34 per cent last year and during the four months to April 2009 was running at half the level of a year ago.

Given the current economic crisis and the contraction in projects in the development pipeline, Glenigan predicts the value of underlying project starts is forecast to remain low over the next 18 months.

The region has seen some peaks in activity thanks to the civil engineering sector which saw total project starts increase by over 50 per cent last year.

Private Housing construction in Scotland has seen a dramatic downturn as a result of the credit crunch. Glenigan recorded the value of underlying private housing starts during the five months to May 2009 was half that of a year earlier and is now at its lowest in over three years.

Non residential sectors in the region have had varying successes. The hotel and leisure and education sectors have performed strongly since the start of the year, while construction in the office, health and community & amenity sectors have seen a drop in the value of underlying project starts over the last few months.

Scotland’s construction industry is expected to see a decrease in the flow of new projects. In the first quarter of 2009, the value of underlying planning approvals fell by 2 per cent year-on-year. Glenigan expects this to result in further declines in the value of underlying construction starts.

The Utilities sector could be a saving grace for the region. In 2008, the value of underlying planning approvals rose by 16 per cent on the previous year in this sector and has remained firm during the first four months of 2009. A number of schemes for Wind Farms are in the early planning stages and  Scottish Water is also expected to continue with a strong investment program.

Looking ahead to 2010, Scotland’s construction prospects should improve. Whilst the value of underlying construction starts is expected to fall by 2 per cent in 2009 as whole, a modest return to growth is also expected for the following year.

Client Focus: Scotland

Region: Scotland

Client: Scottish Water

Major Project: £60m scheme to build a Sewage Treatment Works. The 2 year project comprises Unsatisfactory Intermittent Discharge (UID) works at Meadowhead and Stevenson. The work package collects storm overflows from Irvine and Kilmarnock town centres and transfers these flows to Meadowhead Waste Water Treatment Works. Work is expected to start on site in January 2010.

Past Activity: Client is currently involved in 90 projects. From 2007 to 2009 ytd Scottish Water has been awarded 36 projects with a combined value of £253m.

Latest News:This week Scottish Water announced it has appointed 20 consulting firms under four year framework contracts to carry out capital improvement works.

Contractors they have awarded work to:Carillion Project Services, Rok Civil Engineering, Morrison Construction.

Contact: Head Office, 01383 848200,


Forecast Construction Starts

Forecast for Q3 2009,


-17 per cent on same period last year

Forecast for Q4 2009,


45 per cent on same period last year

By Value

Starts on site and detailed plans approved £m, Nov 08-Apr 09

ValueStart On SiteDetailed Plans Approved

By Number

Starts on site and detailed plans approved, Nov 08-Apr 09

ValueStart On SiteDetailed Plans Approved


Top Clients for Scotland

Client NameContracts awarded in
  2009 year to date 
    No of ProjectsValue
(£ million)
Department of Health    15965  
Scottish Government    9628  
Airtricity Developments NI Ltd    2306  
Network Rail    5294  
North Lanarkshire Council    12273  
Scottish Power    3201  
Dawn Group    1200  
Dandara Ltd    1180  
Gladedale    1150  
Progress Property Company    1125  


Top Contractors for Scotland

Client NameContracts awarded in
  2009 year to date 
    No of ProjectsValue
(£ million)
BAM Construct UK Ltd    5991  
Robertson Group (Scotland) Ltd    9954  
Interserve Project Services    5953  
Morrison Construction    9917  
Laing O’Rourke    1900  
Balfour Beatty Construction    5360  
Highways Management (Scotland) Ltd    1320  
John Graham (Dromore) Ltd    4262  
Morgan Ashurst    2256  
Dawn Group    1200  

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