THE chief operating officer of building giant Galliford Try has highlighted the strength of the construction market in Scotland where public spending is providing a spur for the sector.
Ken Gillespie said Galliford Try’s construction arm enjoyed dramatic growth in Scotland over the last 12 months as it felt the benefit of winning a string of public sector contracts.
These include a £55 million contract to build the new Anderson High School on Shetland and £17m schools work in Moray.
“The Scottish Government has consistently delivered infrastructure and construction projects to the market and I think that’s fuelling the recovery,” said Mr Gillespie.
“We see a good pipeline of public sector opportunities.”
Mr Gillespie said the market had picked up south of the border. Public spending “substantially improved” before the general election in May and has remained strong.
But, he noted: “We will see where the (Conservative Government’s) spending review takes us.”
The sector veteran highlighted the importance of Scotland to Galliford Try’s construction arm. The division, which includes Morrison Construction, generates around one third of its business in Scotland, up from 25 per cent a year ago.
It is generating around £400m revenue on an annual basis compared with £250m this time last year.
This reflects the acquisition of Edinburgh-based Miller Group’s construction business in July last year and organic growth.
Group executive chairman Greg Fitzgerald said: “Our Construction division has made excellent progress in closing out older contracts, and won significant new work in an improving market, strongly assisted by the timely acquisition and swift integration of Miller Construction.”
Mr Gillespie appeared unconcerned that interest rates could rise from the current record low, expressing confidence the Bank of England will only increase borrowing costs slowly and in small steps.
He expects continued growth at the construction business to result in demand for more staff in Scotland. It employs 1,500, up around 100 over the year.
But Mr Gillespie noted concerns that skills shortages could eventually crimp growth in the sector.
“The skills agenda is a massive agenda,” said Mr Gillespie, who is chairman of the Scottish Contractors Group.
He added: “There’s definitely a skills gap between the resources we will need to service the construction industry and those resources that are in the pipeline.”
Mr Gillespie said the industry will work hard to raise awareness of it in schools.
“We want to raise the profile across the whole of Scotland about what great job opportunities there are in construction,” he said. “It’s not just about digging holes and being out in all weather.”
The comments came after Middlesex-based Galliford Try posted record results.
The company made £114m pre-tax profit in the year to 30 June, up 20 per cent on the £95m achieved in the preceding period.
Mr Fitzgerald said all the group’s businesses were buoyed by encouraging market trends.
Galliford Try runs a big housebuilding operation under the Linden Homes brand. However, it does not build homes in Scotland preferring to focus effort south of the border, where Mr Gillespie has said it can make more money with less effort.
The company said: “Housing market conditions remain positive and Linden Homes is making good progress in improving its margin.”
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