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Scottish independence could disadvantage UK construction firms

A third of construction industry leaders think Scottish independence would have a negative impact on their businesses.

The quarterly Construction News Barometer for Q1 2014 found 12 per cent of respondents thought Scottish independence would bring significant disadvantage to their business, while 22 per cent said there would be some disadvantage.

One respondent said: “Economic uncertainty is bound to occur and hamper growth and spending by the Scottish Government.”

Another said: “What will happen in this event is very unclear. We are very active in Scotland and we will adapt to cater for this event.

“However, I think that Scotland will end up considerably worse off in time [should it vote for independence] and therefore the economy there and our business will suffer.”

Just one respondent thought Scottish independence would offer some benefit.

Scottish deputy first minister Nicola Sturgeon told Construction News this month that Scottish independence would offer a new range of economic powers that could “only be a positive for the construction industry”.

Ms Sturgeon insisted investment would continue to flow into Scottish construction regardless of the result of the referendum, but warned Scotland could not afford to “underestimate the challenge of the strength of London”.

The Construction News Barometer showed renewed support for the Conservative Party among respondents, after a marginal majority (47 per cent) previously favoured Labour as the best party for the industry in Q4 2013’s Barometer.

Now 56 per cent said the Conservatives were best for the industry, compared with 38 per cent opting for Labour.

Support for High Speed 2 has swelled considerably since the first Construction News Barometer six months ago, when just 48 per cent of respondents supported the scheme.

This grew to 53 per cent in Q4 2013 and has now risen to 70 per cent of respondents in favour of the £42bn scheme in the latest Barometer.

Despite this swell in support, just 40 per cent thought HS2 would bring significant benefits to their business.

Skills shortage and costs remain the primary concerns among contractors in the year ahead, with 79 per cent of respondents saying rising labour costs were among their greatest concerns (up from 71 per cent in Q4) and 74 per cent citing rising materials costs (up from 69 per cent).

One said there were “real dangers of cost rises and skills shortage”, while another said “client expectation is for prices to remain low and competition means tender prices will be low with squeezed margins, particularly as tier two prices increase first”.

Just over a quarter of participants thought their company would reach pre-recession turnover levels in 2015, up from 11 per cent in Q4, while virtually all (98 per cent) felt clients were showing more interest in development compared with a year ago – none felt there was less client interest.

Construction News Barometer:

The Construction News Barometer is a survey sent to the chief executives, chairmen and senior directors of the top 100 contractors in the UK, ranked according to turnover.

The survey contained 17 questions and was open from 4 February until 24 February. It was completed by 55 industry leaders.

A Construction News Barometer report, containing the full data set, will be sent to those who took part. The survey is repeated quarterly.

Readers' comments (1)

  • hamondprojects

    Scottish independence will offer a new range of economic powers and would be a benefit for the construction industry .However together we are strong and in my opinion Scotland will end up considerably worse off in time and they will regret this decision.

    Unsuitable or offensive? Report this comment

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