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In terms of construction output Scotland has, over the past few years, been one of the strongest performers in the northern half of the UK. However Scotland’s average annual construction output growth, forecast at just 1.9% between 2006 and 2010, will be one of the lowest in the UK. The national average is 3% and one of the strongest regions, Eastern England, is expected to grow by 5.3% over the same period. This projection reflects the relative weakness of Scotland’s projected macro-economic growth when compared with other regions.

Key findings

In contrast with the recent past, infrastructure is forecast to be one of the best-performing sub-sectors, with annual average growth of 2.2%. This is being driven by strategic rail projects, including the Stirling-Alloa-Kincardine railway, and the first phase of the Edinburgh tram network.

New work and repair and maintenance (R&M) have both contributed to recent overall growth, although up to 2005 new work was by far the stronger component. Projections for the next five years suggest that this is set to change and growth will be higher for R&M, averaging 3.1% per annum compared with 1.3% for new work.

Relative to other parts of the UK, construction in Scotland’s housing sector should fare well in the next five years. Annual growth is expected in both public and private sector housing, albeit at a slower rate than in the past (1.5% and 1.4% respectively). However growth within the industrial sector is expected to decline in 2006-7, due in part to modest manufacturing output and lack of factory construction. This sector is unlikely to grow once again until 2009.

Total employment in the industry in Scotland is projected to grow by an average of 8%, equating to 6,310 new jobs each year. Of these new jobs, 1,310 a year (almost 21%) will need to be for Wood Trades and 760 (12%) will be required for Clerical Work.

Download the full LMI Report 538kb PDF file
Download the Blueprint for UK Construction 2006-2010 4.9mb PDF file