BUILDING employers’ confidence in Scotland has taken a dive as fears grow over the prospects of future work in the sector, according to a new report.

The latest quarterly Scottish Construction Monitor, which surveys the membership of the Scottish Building Federation (SBF), has registered a negative rating – after three consecutive quarters during which confidence was rated at plus-2, it has plunged seven points to minus-5.

Employers were asked to rate how confident they were about prospects for the next 12 months, and the fall is being blamed on fears that the future pipeline of new work could dry up.

The latest official figures show strong output across many sectors of the industry over the year to March 2017, but major infrastructure projects have been making an outsized contribution to overall output at just under £3 billion – more than 20 per cent of the total.

By comparison, the infrastructure sector of the industry contributed less than £1bn of industry output in the 12 months to March 2007 – equivalent to eight per cent of total industry output. The housing side of the industry, meanwhile, contributed 19 per cent of industry output in the year to March, whereas its contribution to total output in 2006/07 was more than a quarter. Output from the industry’s private commercial sector has dropped from 25 per cent in 2006/07 to 18 per cent in 2016/17.

Building employers are worried that, as major projects such as the Queensferry Crossing and the Aberdeen Western Peripheral Route (AWPR) draw to a close, the industry is likely to suffer a major contraction due to an apparent shortage of other work to fill the gap.

SBF president Stephen Kemp, the managing director of Orkney Builders, said: “Many building employers are increasingly nervous about the future prospects for our industry.

“We know that a period of record output from major infrastructure projects such as the AWPR and the Queensferry Crossing is about to come to an end. Strip away those numbers and the performance of other key sectors of the industry such as housing and private commercial don’t look that strong. As that infrastructure work dries up over the next year or so, we could see the industry suffer a real shock. Levels of industry employment, which have been very slowly recovering, could slip into reverse. I think that is what SBF members are now worried about – hence the reason why industry confidence has declined.

To ensure the long-term health of the construction industry and the wider Scottish economy, the Scottish Government now needs to focus on supporting smaller-scale projects throughout Scotland. Such a strategy will help to sustain building SMEs that are the real drivers of employment and economic added value in Scottish construction. Without this, we could be facing a cliff edge that tips the industry – and the wider Scottish economy – into recession.”

SBF director William Gray, MD of William Gray Construction, added: “We need to see support and investment for housing and commercial projects. Streamlining the planning and building control process would help, as would increasing staffing so they can make decisions more quickly. One solution would be to change the rules so rates don’t need to be paid on new industrial buildings until they actually have a tenant.”