Overall construction activity in Scotland was relatively stagnant through the second quarter of the year according to the latest Royal Institution of Chartered Surveyors (RICS) Construction Monitor, despite an uptick in infrastructure activity.
A net balance of -2% of survey respondents reported a fall in construction workloads in Scotland in Q2 2026, down slightly from the net balance of 3% that was seen in the Q1 survey. This balance is largely in line with the UK net balance average which sits at -4%.
Looking at the subsectors, infrastructure activity rose through Q2 with a net balance of 27% of respondents reporting an increase, up from the net balance of 2% seen in Q1. Public housing activity also increased through Q2 (a net balance of 13%), as did “other public works” activity (a net balance of 5%). Activity across the private industrial and private commercial sectors was reported to have fallen broadly flat whilst private housebuilding activity saw a decline (a net balance of -20%).
Looking ahead, a net balance of 10% of Scottish respondents expects overall workloads to rise over the next year, which is the same balance as was seen in the survey previous.
In saying this, there is still pressure on profit margins, but not as much as reported previously. Surveyors in Scotland anticipate that profit margins will fall broadly flat over the next 12-months, which is up from the net balance of -20% seen in the Q1 report.
Surveyors in Scotland report that skills shortages have worsened. 60% of survey respondents noted a shortage of quantity surveyors, up from 51% in the last survey, 44% reported a shortage of bricklayers, up from 41% in Q1 report and 47% report a shortage of other construction professionals, which up slightly from the 46% reported earlier this year.
Survey respondent Ian Differ of CBA QS Ltd in Glasgow commented: “Construction inflation, material price volatility, and increased uncertainty due to the introduction of steel tariffs are the main challenges at present.”
Colin Brodie of The Rennie Partnership in Falkirk adds that there’s a “lack of local authority investment.”
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Commenting on the UK picture, Simon Rubinsohn, RICS Chief Economist said:
“The latest results continue to demonstrate the ongoing challenges facing much of the construction industry. Rising material costs are exacerbating existing financial hurdles and being reflected in further pressure on profit margins. Infrastructure continues to show a degree of resilience with workloads benefiting from a number of substantive projects.”
“However, there is little evidence of any improvement in sentiment in the housebuilding sector highlighting the predicament the new prime minister faces in trying to reignite building activity and oversee a sharp uplift in the delivery of social housing. Aside from the headwinds provided by viability, respondents are continuing to point to regulatory barriers impeding the development timeline with problems around the building safety regulator still being frequently cited despite some improvements in the process.“
