Scottish Building Industry Job Losses Grow

The confidence of the Scottish construction sector remains weak as a further 8,500 jobs have been lost from the industry in the first eight months of 2009.

The new figures calculated by the Scottish Building Federation follow a similar survey conducted at the end of 2008 which showed an 8% reduction in the Scottish construction industry workforce last year, equivalent to 20,000 job losses.

The results of the Federation's latest quarterly Scottish Construction Monitor have prompted its Chief Executive to raise industry fears that things might get worse for construction before they get better. He has also underlined the crucial importance of continuing government support for the sector.

More than half of all firms responding to the survey reported having to cut their workforce since January of this year. The average reduction in workforce numbers by these firms was 17%.

Meanwhile, one in seven firms reported taking on new employees since the beginning of the year, with the average increase in staff by these companies being 18%. The balance of firms responding to the survey (around one third of the total) said that, so far in 2009, their workforce has remained unchanged.

Overall, the results show a net reduction of 4% in the size of construction firms’ workforces since the beginning of the year. Based on the latest employment figures from ConstructionSkills, extrapolated across the industry as a whole, this suggests that around 8,500 Scottish construction workers have lost their jobs since the beginning of 2009.

The survey also indicates that confidence within the industry has only marginally improved since the previous quarter and that overall sentiment remains negative, showing a combined confidence rating of -25.

59% of firms responding to the survey remain either slightly less confident or much less confident about the prospects facing their business over the next 12 months compared to the previous 12 months.

Commenting on the results of the new survey, Scottish Building Federation Chief Executive Michael Levack said: "Clearly, the picture across the industry is not uniformly negative. A minority of firms are weathering the economic downturn well and taking on more workers as a result.

"But the fact remains that the recession has forced a majority of Scottish building firms to lay people off since the beginning of this year. And a significant number of firms I’ve been talking to are genuinely fearful that things may yet get worse before they get better."

He noted that many of the job losses identified will go unrecorded in official redundancy figures as those workers made redundant find alternative work in other industries.

He continued: "But 8,500 fewer workers in the Scottish building sector equates to a significant loss of skills and capacity which will make it harder for the industry to recover in the longer term."

"As we start to make the first tentative steps towards recovery, Government needs to understand that we’re not out of the woods yet. We badly need continued government support for capital investment to maintain a consistent flow of work for building firms and stem an ongoing tide of redundancies. This is the case we will be making to MSPs and Scottish Ministers as they start to debate the details of the draft Scottish Budget for 2010-11."

(GK/BMcC)