SCOTTISH construction companies have flagged growing concerns about the potential impact of Brexit on pushing up labour costs, and the sector’s confidence has fallen in the latest quarter, a key survey reveals.

Unveiling its survey’s findings, the Scottish Building Federation (SBF) warned of the potential for the construction sector north of the Border to lose labour to London, as employers in the UK capital addressed the loss of workers from other European Union countries because of Brexit.

The confidence score dropped from -3 to -6, signalling a sharper fall in optimism in the latest quarter. The score now signals three consecutive quarters of decline in construction companies’ confidence about the economic prospects facing their business on a 12-month view,.

Around 57% of building contractors said they were concerned the process of the UK leaving the EU was likely to drive up labour costs in Scottish construction over the next five years. Only around 26% predicted no impact. A further 14% said they were unsure about the effect.

SBF managing director Vaughan Hart said: “With only around 4% of the workforce coming from other EU member states, the Scottish industry is less directly exposed to this impact than other [parts] of the UK, particularly London, where around half of the local construction workforce is made up of non-UK EU nationals.”

He added: “However, the indirect impact on labour costs within the Scottish industry could be much more considerable. An exodus of EU nationals from London’s construction sector could be a significant drain on the availability of labour and skills here in Scotland as more Scottish workers relocate to take advantage of job opportunities down south.”

Separately, a survey today from Bank of Scotland shows a sharp rise in overall confidence among Scottish companies this month.