However, industry confidence is only marginally positive with the 2016 third quarter Scottish Construction Monitor giving it a score of +2, rebounding from a three year low of minus 19 last quarter. In the first quarter of 2016 it was +3.
The percentage of respondents who are more confident about their prospects for the next 12 months compared to the past year has fallen from 31% in Q2 to 24% in Q3. At the same time, the percentage of respondents less confident about their firm’s future prospects has fallen from 48% in Q2 to 18% in Q3. Thus although optimism has waned, pessimism has declined more substantially.
The Scottish Construction Monitor is a quarterly survey of the membership of the Scottish Building Federation (SBF). For Q3, 47 member firms completed the survey between 1st and 12th October 2016.
As well as asked to rate their confidence about business prospects, SBF members were also quizzed on their experience of supply costs. A majority of respondents said they thought the Brexit vote had been driving up industry supply costs. Bricks, timber and joinery, metal products such as doors and windows and insulating materials were the categories of building supplies where respondents reported the most noticeable rise in costs since June this year.
90% of respondents expect building supply costs to rise over the next 12 months. Many also expressed concern that suppliers might be using the general economic uncertainty created by the Brexit vote to increase costs artificially.
SBF managing director Vaughan Hart said: “At the moment, the construction industry is experiencing the same uncertainties as those facing the wider economy. In that context, I’m encouraged that our members’ confidence seems quite resilient, having rebounded back into positive territory this quarter following last quarter’s negative reading.
“In the current climate, it’s important that we don’t inadvertently talk ourselves into an economic downturn by over-analysing the economic indicators out there or jumping to conclusions about how the economy is performing when these aren’t borne out by experience on the ground.”
He added: “We need to remain vigilant against suppliers exploiting the current economic uncertainty to increase costs artificially. I would encourage building employers to bring any such practices to our attention so that we can raise these with government and make sure industry competitiveness isn’t adversely affected as a result.”