Prospects for the construction industry have turned dramatically bleak in the last couple of weeks, Scottish Building Federation chief Michael Levack has warned, as contractors used to filling their order books well in advance are seeing them at less than two-thirds normal levels.
"Contractors at this point in the year would want to have 60% or 70% of next year's work in the bag. This is not the case. I would suggest that these are now around 40%. They have a lot still to find," he told The Herald. "Things looked like they were holding up. But they have changed rapidly in the last couple of weeks."
Figures on the construction industry are notoriously difficult to obtain through layers of contractors and sub- contractors but the SBF claims a Scotland-wide workforce of some 225,000.
Of these, some 15,000 could be redundant before the end of the year, Levack believes, with worse to come in 2009.
"Going into the new year things will really take a nosedive," he added.
The general construction industry, which excludes pure housebuilders who have their own woes, is being hit by a fall-off in private sector jobs, due to a crash in the commercial property market, at the same time as public sector contracts, which typically account for 40% to 50% of their work, are drying up.
Levack wants cross-party action to free up a blockage in the public building works system, thanks in large part, he says, to the slow introduction of the Scottish Futures Trust by the SNP government.
"We currently believe there have been no new projects initiated by this administration," Levack said. "We are not interested in the politics of it. We need the flow of work. It is not past the point of no return but we are past the point where we are losing capacity by the week."
The Scottish Government, for its part, says it plans to spend £14bn on infrastructure this parliamentary term, backing projects including the M74 northern extension, the Southern General Hospital in Glasgow and a replacement prison for the north-east.
But Levack is particularly worried that there are few potential equity backers for schemes, given the banks' current woes and the government's pledge to keep profit margins slim.
"I believe all parties want what is in the best interests of Scotland and can find some means of bringing some infrastructure projects forward," he said.
Levack says the consequences of not doing so extend beyond job losses in the industry. He said that while the Scottish Futures Trust is expected by the Scottish Government to save the taxpayer between £100m and £150m over previous schemes to involve private companies in public works, this will be more than offset by falling capacity pushing up prices later on.
Levack claims profit margins for most construction companies failed to top 2.5% even during the boom times of the last few years and is concerned that if some go out of business and others make massive lay-offs, the industry will be ill-placed to expand again when the market turns and public sector work becomes available again.
He is particularly concerned about the impact in more rural areas, such as the Borders, Grampian and the Highlands and Islands.
Cash-strapped firms could also cut back on efforts to improve their working practices, he added.
"Our industry has improved its image and, in terms of attracting young people in, presentation of sites, everything has become a lot more professional. My fear is that this recession might send us back to the dark ages. When you are working on margins that are wafer thin, among the first things to go is training."
The number of apprentices in the so-called biblical trades (which exclude the likes of electricians or heating engineers) taken on in Scotland dropped from 2800 last year to around 2000 this year.
"Which company that normally takes on half-a-dozen apprentices is going to do that at the moment? Who is going to have the confidence to give them four years' employment?", he said.
