Scottish Construction Industry Sees Further Downturn in 2008

New figures from the Scottish Construction Monitor indicate that approximately 8,500 building trade workers lost their jobs in 2009. This downturn amounts to a loss of four percent of construction jobs, a serious setback following on from 2008's loss of about 20,000 jobs or approximately eight percent of building trade jobs. According to the Scottish Building Federation, about 51% of the 83 construction firms surveyed had eliminated construction jobs in 2009; only 14% indicated they had hired additional workers. Construction firms reported an average reduction in workforce of about 17%. Most companies indicated they were concerned about the future as well, with 59% responding that they felt more uncertain about their business prospects for the upcoming twelve-month period than for the previous year.

While other areas of the Scottish economy have shown improvement in recent months, the chief executive of the Scottish Building Federation, Michael Levack, called for the government to do more to support capital investment and to shore up struggling building trade firms in order to protect jobs and promote growth. It is believed that many unemployed building trade workers have found jobs in other areas of the economy, which may skew unemployment statistics and prevent an accurate picture of the total job losses in the beleaguered construction industry. Levack noted specifically that "8,500 fewer workers in the Scottish building sector equates to a significant loss of skills and capacity which will make it harder for the industry to recover in the longer term."

Some industry and government analysts place the blame for this continued downturn on the Scottish Government's failure to fund public investment. While government officials point out that almost £350m has already been devoted to infrastructure and housing projects, many critics believe that much more should have been invested more rapidly in order to bolster the construction industry. In response to these figures, Finance Secretary John Swinney commented that the proposed budget for 2010-11 offers additional support for the economic recovery with special emphasis on capital projects and combating unemployment. Swinney urged public support for this proposed budget, stating, "I would encourage everyone who shares our view to make the case to the chancellor before the pre-Budget report in November to ensure we can act in this way and support thousands more jobs."

Job Centre Vacancies says: The biggest worry here is the long term damage that the Scottish building industry is facing. With skilled workers going elsewhere for employment, it becomes harder for companies to start to grow again when, as will eventually happen, the economy starts to recover and projects restart or are planned anew.

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