ANNUAL growth in the Scottish construction sector is forecast to average just 0.5 per cent over the coming five years - one-fifth of the projected rate of expansion in the UK as a whole.

Construction employment in Scotland is expected to fall over the 2016 to 2020 forecast period, although the sector is nevertheless projected to require more than 21,000 new workers over the coming five years as people retire.

The projected growth in the construction sector in Scotland is the weakest forecast for any of the nations and regions of the UK in the latest annual report from the Construction Industry Training Board. The completion of several huge public sector infrastructure projects in Scotland during the five-year forecast period is cited as a key factor.

The CITB emphasised the Scottish construction sector had enjoyed three good years of growth, driven by infrastructure spending, adding that its output in 2015 had been at a record high.

Scottish economists including Jeremy Peat, visiting professor at the University of Strathclyde’s International Public Policy Institute, have raised concerns about the impact on overall growth north of the Border when some major infrastructure projects come to an end.

Construction employment in Scotland is forecast to fall by an average of 0.7 per cent per annum over the coming five years.

It is expected to peak at more than 230,000 in 2016, before slipping to around 219,000 in 2020.

The CITB said that, in spite of this projected fall in employment, demographic trends would mean that Scotland needed more than 21,000 new construction workers over the coming five years to meet demand.

The CITB said the three good years of growth recorded by the Scottish construction sector by the end of 2015 had taken its estimated output to £12.6 billion in 2012 prices, a new high.

It added that infrastructure had been a primary driver of this growth, with output in this sub-sector in 2015 more than two-and-a-half times what it had been in 2012.

The CITB said that construction output growth in Scotland was “expected to moderate sharply” over the 2016 to 2020 period, to just 0.5 per cent a year on average, as large infrastructure projects were completed. It added that the infrastructure sub-sector was forecast to see an average annual decline in output of close to six per cent in the five years to 2020 as work on the Queensferry Crossing and Aberdeen Western Peripheral Route and motorway upgrades was completed, and there was less work in the pipeline.

However, the CITB noted most other construction sub-sectors were projected to grow.

It added that, if infrastructure were removed from the figures, annual expansion across the remaining Scottish construction sub-sectors would be around 2.3 per cent on average. It noted this was “not far off” the projected average annual expansion rate of 2.5 per cent for the UK construction sector as a whole.

Growth in the Scottish construction sector over the next five years is expected to be driven in large part by housebuilding.

The CITB said growth in the Scottish private housing sub-sector was projected across

almost all of the forecast period, with average annual expansion predicted at 4.1 per cent in this category.

CITB noted that, even with this rate of expansion, output in the private housing sub-sector in 2020 in Scotland would be 45 per cent below its 2005 peak in real terms

Average annual expansion in the public housing sub-sector in Scotland is forecast at 3.6 per cent over the coming five years.

The commercial construction sub-sector in Scotland is expected to achieve average annual growth of more than three per cent.