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Scottish growth is ‘not sustainable’ says builders’ chief

11 Dec 15 Scotland's construction industry has never been busier but there are complaints that too much money is going to civil engineering and not enough to housing.

Projects like the new Forth Road Bridge are boosting Scottish construction
Projects like the new Forth Road Bridge are boosting Scottish construction

Latest data from the Office for National Statistics show a new record output from the Scottish construction industry over the 12 months to September 2015, rising to more than £14bn.

This compares to a previous record output of more than £13 billion over the 12 months to June 2015.

But according to Scottish Building Federation managing director Vaughan Hart, this might not be an entirely good thing.

He said: “Of course, following the recession, the recent impressive growth in construction sector output is great news with output showing a new record high of more than £14bn over the 12 months to September 2015. However, these latest output figures reinforce the key finding of the Ernst & Young report published earlier this week: namely, that the Scottish economy has become overly reliant on major infrastructure projects as the main source of economic growth and that this is not sustainable in the long term.”

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He continued: “Unfortunately, growth is not balanced across different sectors of the Scottish construction industry. As an overall percentage of Scottish construction industry output, infrastructure has risen from around £1.5bn or 13% of total industry output over the 12 months to September 2008 to almost £4bn or 28% over the 12 months to September 2015.

“As a comparison, new housing was worth around £2.5bn or 22% of total industry output in 2008 but is now worth £2.2bn or 16% of total industry output. Private commercial activity has also declined over that period from £3.1bn or 26% of total output seven years ago to £2.4bn or 17% today.

“Based on this analysis, I have to agree with the assessment that current rates of output growth in the Scottish construction sector are not sustainable and suggest an over-reliance on the infrastructure sector of the industry as the main source of this growth. In making future investment decisions, there needs to be a continued focus on balancing the industry’s performance across different sectors so as to put the industry’s recovery on a more sustainable footing for the longer term.”

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MPU

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