The findings of the new Workload Trends Survey conducted by CECA Scotland were in sharp contrast to the rest of Great Britain, where activity has continued to fall in the post lockdown period.
Workloads rose in Q3, according to 39% of Scottish firms, on balance, following a decline (-35%) in Q2.
However, CECA Scotland said that there are still fears that workloads will fall over the next 12 months. Meanwhile supply of materials is becoming a big issue, with the proportion of Scottish contractors reporting issues at a five-year high and almost half also citing issues with supply of skilled operatives.
CECA Scotland's chief executive Grahame Barn said: “These surveys show a marked difference between Scotland and the rest of Great Britain. The civil engineering sector in Scotland has successfully mobilised very quickly from a standing start in this period and while we hope the survey is the start of a positive upward trend, we suspect there may be an element of "catch up" reflected in the Scottish trends.”
He added: “It is still the case that Scotland's civils contractors are worried about workloads over the next 12 months and while our survey does show some welcome scope for optimism after a very bleak period in recent years, we are still cautious. Coronavirus has impacted heavily on the construction sector in Scotland and going forward, it is more important than ever that Scotland has a strong, secure and sustainable infrastructure pipeline to ensure the sector can recover and rebuild after Covid-19.”
As lockdown restrictions were gradually eased, workloads improved in Scotland during the third quarter of 2020. On balance, 39% of respondents reported an increase in workloads on a year ago, up from 35% reporting a fall in Q2. Overall, 61% of the respondents reported that workloads had increased, and 22% reported that workloads had fallen. In Great Britain, 15% of firms, on balance, reported that workloads fell compared to a year ago. This marked the second consecutive quarter of annual decline after a near 11-year low balance of –43% was recorded in Q2. In total, half of firms reported that workloads had decreased. In England, 32% of firms, on balance, reported that workloads had decreased compared to 12 months ago. In Wales, 57% of firms, on balance, reported a decrease in workloads in Q3, up from a survey-record low balance of -92% in Q2, but the second consecutive quarter of annual decline.
After recording a negative balance in Q2, 40% of Scottish firms, on balance, reported that order books had increased in Q3 compared to a year earlier. This was the highest balance since 2016 Q2. Overall, 62% of respondents reported that orders had increased, and 21% reported a fall. In Great Britain, 8% of firms, on balance, reported that order books had decreased compared to a year earlier, compared to a balance of –32% in Q2, which was the lowest in nine years. In total, 44% of firms reported that orders had decreased. Orders in England fell, on balance, according to 16% of firms, the second consecutive quarter of annual decline. Overall, 46% of firms reported that orders had decreased. Similarly in Wales, orders fell on an annual basis for the second successive quarter in Q3, according to 85% of firms, the lowest balance since 2010 Q2.
Labour market conditions improved in Scotland for all types of worker in Q3. On balance, employment of skilled operatives, staff and other operatives increased according to 19%, 15% and 9% of firms, respectively. This is an improvement from the negative annual balances recorded in Q2. In Britain, the annual balances for all types of worker remained negative for the second quarter in a row in Q3; -18% for staff, -14% for other operatives and –5% for skilled operatives. In England, employment of other operatives, staff and skilled operatives fell according to 33%, 31% and 20% of firms respectively, the lowest balances in a decade. However, in Wales, employment of skilled operatives, other operatives and staff increased, according to a balance of 5% of firms.
In Scotland, 20% of firms, on balance, reported that tender prices for new work increased in Q3 with 29% of all respondents reporting higher tender prices and 62% reporting no change. In Great Britain, 15% of firms, on balance, reported an increase in tender prices for new work, the lowest balance in nearly eight years. In England, prices increased, on balance, according to 11% of respondents, the lowest since 2013 Q1. In total, 69% of the respondents reported no change in tender prices. In Wales, 28% of firms, on balance, reported an annual increase in tender prices for new work, down from 33% in Q2. Overall, 44% of the respondents reported higher tender prices compared to a year earlier, but 39% reported no change.
In Scotland, 22% of respondents, on balance, reported that tender prices for R&M work were higher compared to a year earlier, the lowest balance in two years. One-third of all respondents reported that prices had increased, whilst 56% of firms reported no change. In Britain, on balance, 14% of respondents, reported that tender prices increased compared to 12 months ago, the lowest balance in nearly eight years. 66% of all respondents reported that prices were unchanged. In England, 12% of the respondents, on balance, reported that tender prices were higher in Q3, the lowest since 2013 Q3. 68% of the respondents reported that tender prices were unchanged, whilst 22% reported that they had risen. In Wales, 20% of the respondents reported increased tender prices, whilst 15% reported that they had fallen, leaving a balance of 5%.
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