Winter blues
Things could only get better, surely?
No, not a reworking of the Blair campaign for 1997. It's about the construction industry.
It took such a hit at the start of the recession that there must be some signs of things looking up.
Failing that, there must be some signs of looking to a time when things will look up.
But mine down into the detail of the Fraser of Allander/Scottish Chambers of Commerce survey out this week, and reflecting the first, very cold quarter of the year, and there are some chilling figures.
The number of construction companies increasing their investment:
none.
The number that expect to increase investment in the next three
months: none.
No wonder publication was swiftly followed by news of the demise of Bone Steel in Wishaw, a steel construction and supply company that had seen the market fall 50% in 18 months. It took 118 jobs down with it.
Big Impact
In wholesale distribution, the number investing: again, none.
In manufacturing, a large category where investment levels have a big impact, the number of firms increasing investment is nearly 18%, but the number expecting it to fall is 24%.
Now, these surveys can be misrepresented to make it seem everything is rosy or gloomy, when they are based on balances between those with improving figures and those with declining figures.
And in almost all categories, there are those who are seeing things get better.
But that investment figure is significant for what it means for the companies that would supply investment goods, and also for the broader lack of optimism beyond the short term.
Fuel cost brunt
Construction firms can see the public sector contracts that have sustained some are now looking very uncertain after the election, when the deficit crunch begins to bite.
Five per cent see an upward trend in public sector work, while 75% report it's falling.
In the private commercial category, 48% see declining trends in expected contracts, and none see improvements.
Construction firms reckon they're working at only 65% of capacity.
Mine a bit further, and the alarming numbers go on.
In retail distribution, optimism is up for 3%, and down for 57%. It's facing the brunt of the fuel cost increases.
Skills shortages
In tourism, hotel occupancy is at 47%, the lowest for 10 years - though that's perhaps the most obvious victim of harsh winter weather.
So what about trends in bookings? Even with sterling weak, 20% see improvements, and 60% see deterioriation.
Even where people are recruiting, there are some signs of skill shortages.
In tourism, for instance, seasonal business means half of firms are recruiting early in the year.
But 15% are experiencing recruitment difficulties - more than you might expect in the current state of the jobs market.
In construction, 20% of firms were recruiting during the survey period last month, but only to fill vacancies. None are expanding their payroll.
And none of them were finding difficulty in finding new employees.
Hullo, I'm Douglas Fraser, and I'm business and economy editor at ´óÏó´«Ã½ Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 16th Apr 2010, spagan wrote:Ah Douglas - but have a look at what is happening in the SE corner of "South Britain" as the dear leader likes to call it.
Down there, the corner has turned - leafy shoots have opened - full bloom is around a corner - irrespective of whether New Labour or New Tory take the reins.
Was it always that way? "No"
Does it always have to be that way? "No"
Why do Scottish builders have to wait - cap in hand - until someone from SE Britain decides to "invest" in the "cheap as chips" North?
We must be mad to accept that the only way to exist is to wait until London booms and then accept - with tugged forelock - the crumbs from off Westminster's table.
Slainte Mhor
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Comment number 2.
At 16th Apr 2010, dorrat1 wrote:Biggest contract in Scotland in recent times? new southern general - builder Australian company with Spanish architects - its great achievement Wembley - on time on budget? Mmm.., new commonwealth pool in Edinburgh - contractors (and workforce) from Eire I believe. Increasingly the same is happening with other 'public' works. Perhaps someone needs to ask how many foreign companies are taking work from Scotland's hard pressed construction industry. Tax payers' monies being spent on these projects will not be benefiting the local or national economies of Scotland or Britian for that matter, but will be sent abroad. ´óÏó´«Ã½ers? Salary cuts, redundancies, monies being wasted tendering for work now being shelved because of cutbacks or is being awarded to increasing numbers of foreign firms moving in on Scotland - Shame on the politicians who have allowed this to happen.
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Comment number 3.
At 16th Apr 2010, Wee-Scamp wrote:This is actually a great opportunity to start driving down house prices to a more realistic level.
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Comment number 4.
At 16th Apr 2010, redrobb wrote:When ROME burned who was it that fiddled! This little island including our part of it struggles to cope with its indigenous burdens let alone those not from this land. Just how many public / private initiatives utilise non-indigenous people / resources, quite a few I suspect! Someone has to turn this around PDQ! Unfortunately we don't rate that high as a critical case, there's only circa 5m of us and > 60m south of the border me thinks!
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Comment number 5.
At 16th Apr 2010, BluesBerry wrote:Things could only get better, surely?
Well, I thought so when I read about Mr. Swinney and £76 million funding.
How do you feel about the £76 million funding that is supposedly going into
- colleges,
- affordable housing,
- transport and
- renewable energy infrastructure projects in Scotland.
Mr Swinney seemed genuinely interested in suporting Scotland's economic recovery, particularly in the construction industry.
I was particularly impressed with the £31 million into affordable housing. Mr. Swinney felt this would lead to 21,500 additional, affordable homes.
I wonder in particular how you feel about this investment in Scotland at a time that the UK Government appears to be withdrawing from fiscal stimulus. In fact, the Scottish Government seems rather alone in spending on frontline public services and taking action to ensure ongoing investment in its Economic Recovery Plan.
Do you see thorns among the roses?
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Comment number 6.
At 16th Apr 2010, nedafo2 wrote:I appreciate that construction is a big employer but why do the media in Scotland seem to be so obessessed by it. It is secondary to the real wealth generators. It shouldn't lead the recovery. Businesses need new premises when they are expanding and individuals will buy new houses when they can afford to move. Once that happens, the construction industry will improve. Until then, the construction industry will have to survive on publicly funded projects and, unfortuntaley, these will become fewer and fewer as the spending cuts start to bite.
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Comment number 7.
At 16th Apr 2010, dorrat1 wrote:the thorns amongst the roses is that the bulk of this work is going to companies with workforces from other countries (Nicola Sturgeon approved the appointment of the Australians) and how can our construction companies survive if what little publicly funded projects are available are awarded to non domestic businesses. It doesn't happen in other countries so why do we let it happen here? As I said shame on the politicians who are overseeing the demise of another Scottish industry.
and yes I do have an interest both husband and son now facing redundancy and both hardworking Scots in the construction (not housing)industry.
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