Over the last five years we have witnessed the longest, and perhaps strangest, recession in living memory.
While economic prospects remain varied in different areas of the country, we are seeing a growing momentum within the construction sector which is giving us further cause to be positive about the outlook.
The year has started brightly with the International Monetary Fund (IMF) sharply increasing its growth forecast for the UK economy to 2.4 per cent, a higher figure than any other major European economy.
As a sector which tends to provide the most relevant indication of economic revival, it is encouraging to see signs of increased construction activity. The latest survey from the Construction Products Association (CPA) reported growth for three consecutive quarters at the end of 2013, the first time the sector has achieved this in five years. To further support this, last month the Scottish Building Federation unveiled statistics showed an overall rise of almost £1bn in construction output in Scotland 2013, taking the total value to £10.7bn.
Looking at wider infrastructure projects in Scotland, there are further reasons to be optimistic about growth in the economy. Work involving a number of firms on the new £1.4bn Queensferry Crossing will continue while the first phase of the long-term, £3bn plan to dual the A9 between Perth and Inverness begins.
There are additional planned road building projects which will further bolster Scotland's construction sector. The first phases of improvements to the M8, M73 and M74 and continued work on the Aberdeen Western Peripheral Route will be rolled out this year. We are also seeing the re-emergence of Scottish local authority spending on key projects through the new Excel framework which covers street design and public realm developments as well as major grade separated junction schemes.
Further spending on healthcare projects will also benefit the construction and engineering sectors in Scotland with work due to commence shortly on Edinburgh Sick Kids Hospital while Dumfries & Galloway is in the bidding stages for its new hospital.
Our firm is also seeing a growing overseas demand for expertise from developing countries for healthcare building, particularly in emerging countries as they catch up with the west. WSP specialists, including colleagues from our Scottish operations, are currently looking at projects in the Middle East, Africa and Turkey.
There is also significant movement in Grade A office developments in Glasgow with four currently on site. Although these are largely existing schemes, that have been dusted down and re-started as opposed to new schemes, it is another encouraging sign of growth.
Another key area for economic recovery is the retail sector. In Scotland we are seeing some greater activity on retail developments, including the construction of new supermarkets within mixed use schemes. While there is currently limited activity in developing stand-alone retail, there are a number of retail park refurbishment and expansion projects which are underway across Scotland.
Renewable energy, another sector which supports growth in construction, also continues to be particularly active in Scotland although the removal of subsidy support for onshore wind and large-scale solar projects will likely focus developers towards small scale and/or community supported schemes. More solar projects are also taking shape in Scotland which is now considered a viable market although there are challenges over return on investment still to be addressed.
In amongst the mixed bag of measures unveiled in last month's Budget were a few nuggets which could further stimulate the UK construction sector. The announcement to support the building of 200,000 new homes in England and Wales, while falling well short of current demand, is at least a positive step forward and hopefully a platform for other increases in years to come. The Scottish Government's announcement that a further £8.4 million will go towards apprenticeships, part of an extra £85m for the whole UK announced in the Budget, is also helpful to the sector.
While we have a long way to go to get back to pre-2008 levels of growth and must recognise that the emerging recovery is not evenly spread across the UK, the current level of construction and infrastructure activity certainly gives us cause to be more upbeat and, quite literally, something to build on as we move forward in 2014.
Keith Gowenlock is the director of WSP (Scotland)
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article