Scottish construction firms’ confidence in business prospects over the next 12 months has fallen for the first time this year, according to a report published today.
The Scottish Construction Monitor, a quarterly survey of more than 700 member firms of the Scottish Building Federation, found that following three successive quarters of recovering industry confidence a poor economic outlook and emptying order books has caused a mood of pessimism to return.
Based on a scale where +100 means very confident and -100 very pessimistic, the latest survey found employers’ confidence has slipped by 13 points in the third quarter and now stands at -19.
Compared to the previous quarter, the percentage of respondents who are more confident about their business prospects for the next twelve months compared to the past year has dropped from 30% to 19%. Meanwhile, the proportion of those employers who are more pessimistic about the outlook for their business over the next year has increased from 35% to 46%.
“Following successive quarters when industry confidence appeared to be gradually recovering, this latest survey shows confidence now heading back into reverse,” said Scottish Building Federation chief executive Michael Levack.
“I believe this must be a symptom of the significant cuts to public capital spending now confirmed by the Scottish Government’s spending review, combined with continued sluggish performance in the private sector.”
The increasing pessimism is thought likely to have a damaging effect on apprentice recruitment and retention. Of those employers surveyed who currently employ apprentices, only 12% expect to be able to recruit an increased number of apprentices over the next year, while 56% expect they will have to cut back on the number of apprentices they employ. Out of the total, 17% anticipate having to cut the number of apprentices they recruit to zero this year.
Levack urged the Scottish Government to take action on the issue by fast-tracking in to law the Sustainable Procurement Bill, which is designed to recognise the creation of skills and training opportunities as part of the system for awarding public sector contracts
“The public procurement system could do a great deal more to recognise the significant efforts many building firms are making in continuing to offer apprenticeships in the face of such tough trading conditions,” he said.
“With a downward trend in the number of apprentices working in construction apparently set to continue over the next 12 months, the Scottish Government needs to accelerate the timetable for bringing forward this legislation and extend its scope beyond major contracts to include public construction contracts of any size. In so doing, the Scottish Government would give a greater number of industry employers the confidence to recruit more apprentices, and help the industry to start rebuilding the skills and capacity it has lost.”