Boost for Scottish construction as new projects advance

A surge in detailed planning approvals and a significant rise in major contract awards this summer signal growing confidence in Scotland’s construction sector, with a strengthening pipeline of new projects set to drive further growth.

Glenigan data shows that detailed planning approvals in Scotland were worth £4.23 billion in the three months to July, up 41% on the previous three months and 54% higher than in the period a year earlier.

The growth has been led by an upturn in approvals for major projects – worth over £100 million – in the nation which totalled £2.35 billion over May-July, well over double the level of a year earlier.

Significant projects approved

Significant projects which have secured approval over the summer in Scotland include the £700 million University Monklands Hospital (Project ID: 17038923) and the £400 million HMP Glasgow, where Kier Construction has been appointed as the main contractor (Project ID: 19429386).

But the outlook for new contracts on smaller and medium-sized Scottish construction projects also looks brighter. Underlying project approvals – worth under £100 million – increased to £1.87 billion in May-July, up by 10% on the previous three months and 5% higher than a year earlier.

Project approvals in Scotland in the health, social housing, hotel & leisure, utilities, infrastructure, offices, retail and community & amenity sectors were all well up, compared to a year earlier.

The signs are that the momentum is continuing into the autumn and Glenigan data provides details on numerous projects in the pipeline for Scottish construction companies which offer work opportunities over the months ahead.

Hotel & leisure approvals up

Hotel & leisure project approvals were particularly strong; rising more than three-fold to £367 million over May-July, compared to a year earlier.

One significant Scottish construction scheme at the pre-tender stage, where detailed plans have been granted, is the £50 million Zedwell Hotel involving the conversion of a former Debenhams store in Edinburgh’s Princes Street into a hotel. Work on the scheme for client Criterion Capital and involving almost 11, 000 sq m of space, is set to start next summer and run for 12 months (Project ID: 24233421).

Health-related construction – which rose dramatically in the three months to July and accounted for almost a quarter of all approvals in Scotland – is another growth area.

One project in the sector where tenders are set to be invited and work is due to start early in the new year is the £9.2 million North Sutherland Health and Social Care Hub in the Tongue. Work on the project, which is set in spectacular Highland scenery and involves a floor area of over 2,000 sq m, is set to run for 13 months (Project ID: 23029834).

Office work is another promising area for new work in Scotland with detailed planning approvals worth £907 million over May-July. A large project where detailed plans have been submitted is a £19.5 million office refurbishment extension at Calton Row in Edinburgh for Macquarie Group. Work is set to start next spring on a floor area of over 7,000 sq m and run for six months (Project ID: 24039201).

The community & amenity sector in Scotland is also providing opportunities for new construction work. Detailed plans have been granted for the £18.3 million St Stephen’s Community Hub at Coatbridge in Strathclyde for North Lanarkshire Council. Morrison Construction is the main contractor on the scheme where work is set to start in the spring and run for six months (Project ID: 23126968).