CONFIDENCE in Scotland’s construction sector has remained steady for the third consecutive quarter, but there are is uncertainty about how Brexit will affect the industry, leaving it with a sense it’s in “limbo”, according to the latest sector survey.

The Scottish Construction Monitor from trade association the Scottish Building Federation (SBF), asked employers to rate how confident they feel about the prospects for their business over the next 12 months compared to the past year.

It rates overall confidence at plus two for the third quarter in a row, after it slumped to minus 19 in June following the Brexit vote.

And 43 per cent of respondents reported a rise in the number of employees over the past year, compared to a fifth who reported a decline. The remaining 37 per cent saw no change.

Looking ahead to the next 12 months, 41 per cent expect to see their workforce rise, while 14 per cent expect their numbers to fall and 43 per cent expected it to remain stable.

Over the longer term, almost a fifth (19 per cent) expect overall employment in the industry to continue its slow decline over the next five years, while 17 per cent expect the numbers employed to rise to around 200,000. A third expect construction jobs to remain stable at around 175,000 and 30 per cent were unsure about the sector’s performance over the five years.

Most respondents (82 per cent) said Brexit was likely to happen, but 40 per cent did not known what the likely impact on their business, while a third said it would have a negative impact on the Scottish construction sector.

Just 16 per cent said it would have no impact, and nine per cent thought it would be a positive impact.

A negative impact of fragmentation and a trend towards more self-employment was anticipated by 58 per cent of respondents, and 67 per cent thought an increase in public funding for housing will have a positive impact on the industry as a whole.

Meanwhile, 59 per cent feared the growth of project management companies and a trend towards outsourcing labour rather than providing direct employment will have a negative impact on the industry.

SBF managing director Vaughan Hart said: “Looking at this latest set of results, there is a real sense that the industry remains stuck in a state of limbo just now.

“The recent economic signs have been positive with strong output and rising employment within the Scottish construction sector.

“At the same time, ongoing uncertainty on the political and constitutional fronts is making industry employers feel quite nervous about the future outlook.

“In terms of future trends, most building employers judge that prioritising additional public investment, particularly towards housing, would bring the greatest benefit to the industry and to their businesses. Moves away from direct employment towards project management companies that outsource their labour is also viewed as a negative development that will hamper sustainable industry growth in the future.

“Our general message to government and to politicians across all parties continues to be that the more certainty and stability they can provide, the more confident construction industry employers will feel – and the stronger position they will be in to boost employment and to generate output that benefits the economy as a whole.”