THE latest Super Sectors report from leading construction industry intelligence provider, Barbour ABI, shows there is much to celebrate in the education, hospitality, and residential construction sectors in Scotland.
The Super Sectors report is a monthly examination of Planning Application Approvals and Contract Awards by sector and region, giving a robust picture of the construction industry across the UK. By examining planning approvals as well as contract awards, the report shines a light on the current and likely short-term future of the industry in each region. The February edition has just been launched and indicates some interesting trends in the construction industry in Scotland.
The education construction sector in Scotland delivered a strong report with £127m of contracts awarded and £106m of planning applications approved. These figures place Scotland top of contract awards and second in terms of the value of planning applications approved for the whole of the UK for the education construction sector.
Scotland also topped the Barbour ABI Super Sectors report for the value of planning applications approved in the hotel, leisure & sport construction sector. In Scotland projects valued at £92m were given the green light. This figure is almost double the value of contracts awarded in February in the sector (£52m) and indicates the sector is looking ahead to more positive times following the recent difficult years.
Infrastructure construction in Scotland is also looking very positive with the move to renewable energy sources fuelling much of the demand in the sector. Scotland ranked second in the UK for both contract awards (£182m) and planning approvals (£673m), showing the growth in this sector is unlikely to dip in the short-term.
As far as residential projects are concerned, Scotland was very much middle of the table for contracts awards (£179m) but shot up to third place in terms of planning approvals, with £475m of projects ready to break ground.
By contrast Scotland is lagging behind the UK average for industrial, commercial & retail, and medical construction. There were £54m worth of industrial construction contracts awarded and £61m of planning applications approved in February. Just £12m of commercial & retail contracts were awarded and £17m of planning applications approved in Scotland last month.
Despite the recent focus on healthcare facilities and several UK Government schemes to build or refurbish hospitals by 2030, Scotland has taken a different approach with only £1m of contracts awarded in the sector in February and just £3m of planning applications approved.
Tom Hall, Chief Economist at Barbour ABI said: “The construction industry in Scotland is looking in good shape for the short-to-medium term with the value of planning applications approved being more than the value of contracts awarded in almost every industry sector. This indicates a very buoyant industry with a positive pipeline of opportunities. While it is encouraging to see that education, residential and hospitality sectors are recording strong numbers, it is a slight concern that the medical and commercial & retail development opportunities are not keeping pace. Health is a devolved issue and so one of the reasons for a difference in investment in healthcare infrastructure in Scotland could be political.”
