Page last updated at 10:56 GMT, Tuesday, 26 January 2010

Building the foundations of Scottish growth?

By James Shaw
BBC Radio 5 live, Scotland

Builder laying bricks
The Scottish construction industry has seen thousands of job losses

A cold wind is blowing in from the North Sea and the skies over Montrose are grey; but at least the snow has gone and it is not raining.

Jamie Pert, joint managing director of Pert-Bruce Construction, is checking out one of his firm's projects -a stone-built property in the centre of town which is being gutted and turned into townhouses.

He hopes they will be ready to go on the market some time in the next few months.

It is the kind of job his company can continue with while outside contracts are hard to come by, after an extremely tough year in 2009.

"The last year has been very difficult in the industry right throughout Scotland," Mr Pert says.

"We've found it very hard because we've had to let about 15% of our workforce go."

He adds: "To tell people that they don't have a job when they've got mortgages to pay and bills to pay - it's very difficult.

"But when survival comes knocking at the door, we've got be able to react and we've got to be strong enough to react."

Future

Jamie hopes that he will be able to bring some of those former employees back when things start to get better.

And he is proud of the fact that the firm was able to take on two new apprentices, even in the depths of the recession.

But when will the good times return?

I think there's a sense of reality come back to our industry
Jamie Pert, Pert-Bruce Construction

According to Michael Levack, the head of the Scottish Building Federation trade body, the worst may be yet to come.

He says back in 2007, the industry in Scotland employed about a quarter-of-a-million people.

Around 30,000 have lost their jobs since then - and there is no reason to believe things are about to get better.

The reductions in public spending which are widely predicted whoever wins the next election are likely to hit the construction industry hard, particularly as house-building and other commercial work have dried up.

It is expected there will be far fewer big projects like the M74 extension through Glasgow or the Commonwealth village in the city's east end, planned for the games in 2014.

Rising property prices were one of the factors which fuelled unsustainable lending, and now that the banks are so much more wary about handing out new mortgages and financing property developments, the prospects for growth in the industry are not good.

Uncertainty

Mr Levack thinks there could be two more lean years ahead before things pick up in 2012.

Jamie Pert is confident that his company has survived the worst and does have a future, but there's still an atmosphere of uncertainty about what will happen in the coming months.

Jamie Pert
Tighter lending has left some building firms wary of the future

Normally he would know what jobs were on the books as much as 12 months in advance.

Now it's much more hand-to-mouth, and that makes it hard to be confident about the future.

"No more boom and bust," that was Gordon Brown's mantra when he was Chancellor of the Exchequer.

But Jamie Pert says it is exactly that fear of boom and bust caused by the recession which means he and many others like him will think very carefully before embarking on expansion plans in the future.

"I think there's a sense of reality come back to our industry that lending is going to be far more difficult," he says.

"I think the banking situation is going to make it difficult for borrowing for developers and construction companies alike.

"I can't see us coming back to the situation we were in, where it just seemed to be boom time for any sort of house developments."

Grey skies over Montrose and not much sign of a break in the clouds.



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