The challenging economic outlook has prompted a further drop in confidence in the Scottish construction sector, according to a new quarterly survey of 700 member firms from the Scottish Building Federation (SBF).

The confidence barometer has dropped by nine points since the previous quarter and now stands at negative 28 – six points below where it stood at the beginning of 2011.

Two out of three Scottish building firms responding to the survey predict publicly-funded construction activity will contract in 2012. One-third expect construction employment to fall, outnumbering those predicting a rise by a factor of more than three to one.

Most anticipate another tough year for housebuilding and the private sector, with nine out of 10 firms anticipating these sectors to remain stagnant or to decline over the next 12 months.

The survey found around 60% of employers expecting the number of workers and apprentices they employ to remain steady over the next 12 months, but more than 30% think their headcount will fall.
Official statistics show the Scottish construction sector lost 30,000 jobs in the 12 months to September 2011.

Repair and maintenance emerges as the industry sector with the most positive outlook, with more than a quarter of firms predicting activity in this area will rise during 2012. But the outlook for publicly- funded construction activity is very downbeat, with almost two-thirds of firms predicting output will drop and only 7% expecting activity to rise.

Although expected to perform better than the public sector, the private sector faces limited prospects in 2012, with 44% of employers saying they expect construction activity to stay the same and 41% forecasting a decline.

Housebuilding – already at an all-time low in units completed annually since devolution – faces a similarly challenging year, with 40% of firms expecting activity to drop again this year and a further 49% believing it will remain static.

The SBF’s chief executive Michael Levack commented: “Over the coming months, I hope the industry can work constructively with government at all levels to start rebuilding confidence that has been shattered by the economic downturn.

“An excellent place to start would be to start dismantling the huge unnecessary bureaucracy around procurement and planning that has stifled our industry for far too long.”