Scottish construction sector ends downward trend of decline

The latest data published by Scotland’s chief statistician has revealed a much-needed surge in growth as the construction sector grew by 1.8% for the second quarter of 2018.

It will be a relief for the industry north of the border following a sharp 1.4% decline for the country’s construction sector. The period of decline felt over the winter months has been largely down to extreme adverse weather conditions and big infrastructure projects like the Queensferry Crossing coming to an end with no similar big schemes in the pipeline to follow.

The first estimate of Scotland’s Gross Domestic Product (GDP) covering the period April to June, show the economy grew by 0.5% in real terms compared to the previous quarter. It means the Scottish economy grew at a higher rate than the UK as a whole which grew by 0.4% in the same period.

Broadly speaking, the National Statistics Publication for Scotland data found Scotland’s GDP improvement follows growth of 0.4% seen in the first quarter of 2018. Compared to the same quarter last year, Scottish GDP has grown by 1.7% compared to the UK’s 1.3% growth over the year.

Commenting on the data, Scottish finance secretary Derek Mackay said: "The Scottish government is focused on building on the country's strong economic foundations, supporting businesses to stimulate growth jobs and investment. Our programme for government includes an ambitious package of measures to ensure we are delivering for the economy of today and ready to seize the opportunities of the future."

While welcoming the turnaround, David Mundell, the UK government’s Scotland secretary still warned against complacency and said work still needed to be done. “Scotland's economic performance is still struggling to close the gap with the UK economy which has opened up over recent years. I urge the Scottish government to focus on growing Scotland's economy."

Upturn in construction figures also provide welcomed optimism to the highly concerning data in July by business recovery firm Begbies Traynor which showed the sharp rise in construction firms within Scotland in ‘critical’ distress – referring to businesses that had winding up petitions or decrees totalling more than £5,000 against them. 

Figures published for April to June 2018 identified a 300% rise when compared with the previous quarter and reinforced the extensive slowdown felt by the sector.