Focus on Scotland

Project starts in Scotland fell 0.4% in 2012. While the overall performance of underlying new work in the country was essentially flat, a look at the sectoral breakdown highlights some interesting trends. 

The largest and one of the best performing sectors in 2012 was utilities: Glenigan estimate that underlying projects were worth £770m or 20% of total underlying new work in the country last year. Utilities saw a 39% increase in the value of underlying projects starting last year, with the sector dominated by work from renewable energy projects, wind farms accounted for the bulk of activity at the larger end of the project scale with a large number of projects over £10m getting underway. Lower down the scale a number of smaller hydro-generation projects also helped boost the value of underlying starts in the sector last year. 

Scotland has been one of the focal points of UK investment into green energy and as a result underlying utilities starts in the country accounted for 27% of the UK total. 

The overall outlook for Scotland is positive compared to many other parts of the UK. The private sector will be the driver of construction starts this year, but overall growth will be constricted by falls in public sector work following falls in approvals for education and health projects. The scenario of strong private sector and weak public sector is something that has characterised the UK construction industry in the last 12-months. Scotland’s trump card however is the boom in renewable energy projects and with the country setting itself an even more ambitious target of 50% of energy demand to be supplied from renewable sources by 2015 investment is set to continue for the foreseeable future.