Scottish construction outlook improves

Scottish construction is expected to rise in Scotland this year. Only Northern Ireland the South West of England are expected to outdo Scotland in terms of the rise in construction starts.

Glenigan is anticipating a rise of around 14% in the underlying value of Scottish construction starts in 2020.

Glenigan’s economics director Allan Wilén: “We expect strong increases in private residential, infrastructure and health work this year after strong rises in work coming through the planning system in 2019.”

Housing boost

The number of new homes under construction in Scotland increased last year as house prices outpaced the rest of the United Kingdom for the first time since 2008.

According to the Nationwide, the average house price in Scotland rose by 2.8% to £151,952 compared to a national rise of just 0.8%.

With house prices rising, housebuilders and housing associations are building more homes. National House-Building Council figures show a 1% increase as work began on 12,268 homes (2018: 12,093).

Major housing schemes getting underway this year in Scotland according to Glenigan’s research include a £90 million redevelopment of Glasgow’s former Victoria Infirmary by Sanctuary Housing Association with (Glenigan Project ID: 16276800).

Cruden started work in this February on this scheme and has also got underway on the £30 million Longniddry Farm residential development for Places for People (Glenigan Project ID: 16277083).

Civils rebound

A slump in major infrastructure projects in Scotland hit confidence for civil engineering contractors last year, but the Scottish Procurement and Property Directorate is working on a new framework. A consultation closed in January and procurement on the agreement should start later this year.

Some other roads contracts are still being procured. Glenigan’s data shows tenders have been returned on contracts ranging from a £24 million highways framework for Stirling District Council (Glenigan Project ID: 19409406) to a £7 million roundabout project in Fife (Glenigan Project ID: 18264001).

Royal BAM tops the pile

The most successful contractor in Scotland last year was Royal BAM with the UK arm of the Dutch giant winning £257 million-worth of work north of Hadrian’s Wall.

Royal BAM’s workload in Scotland includes a raft of major schemes just moving onto site, including a £50 million rail depot at Pitlochry (Glenigan Project ID: 18384417), where work started at the end of last year.

Glenigan’s construction research also shows that Royal BAM is expected to start work this summer on a £35 million health centre in Glasgow this summer (Glenigan Project ID: 19383603).

Local contractors are also benefiting from more work coming on stream and taking on big schemes.

Elgin-based Robertson is second place in Glenigan’s of the ranking of the top 10 contractors in Scotland with £240 million-worth of work including a £100 million aircraft hangar scheme at RAF Lossiemouth (Glenigan Project ID: 17158736).

A trio of Glasgow-based outfits RJ McLeod, Cruden and CCG, also feature in the table.

RJ McLeod is working on the £60 million Skye Triangles, which comprises expansion of the harbours at Uig on the Isle of Skye, Lockmaddy in North Uist and Tarbert in Harris (Glenigan Project ID: 17459891).

Cruden is riding the residential wave and so is CCG, whose workload includes a £20 million flats scheme at Clydebank for Cube Housing and West Dunbartonshire Council (Glenigan Project ID: 17291625) as Scotland’s contractors get amongst the contracts spoils for the expected boom.