Q4 2022 was a poor period for construction in Scotland, with project starts, main contract awards and detailed planning approvals all having decreased significantly on the previous year. However, an increase in the value of detailed planning approvals against the preceding quarter provided some optimism.
Scotland overview
Totalling £758m, work starting on-site in Scotland decreased 65 per cent during Q4 2022 to remain 40 per cent lower than a year ago. Underlying (less than £100m in value) project-starts performed poorly, having decreased 43 per cent against the preceding quarter on a seasonally adjusted (SA) basis as well as 39 per cent compared with a year earlier. Major (£100m or more) project-starts totalled £100m during the period, an 88 per cent decrease compared with the preceding quarter and a 50 per cent fall against the previous year.
Main contract awards in Scotland added up to £1.81bn, a 1 per cent compared with the preceding quarter but a decline of more than a quarter (-26 per cent) lower than a year ago. Underlying contract awards performed relatively well, having increased 4 per cent (SA) against the preceding quarter and only declining 2 per cent against the previous year to total £1.71bn. Major project contract awards, at £101m, suffered having experienced declines of 61 per cent against the preceding quarter and 86 per cent compared with the previous year.
Adding up to £2.02bn, detailed planning approvals in Scotland increased 23 per cent against the preceding quarter but remained 27 per cent lower against the previous year. Major project approvals, at £101m, fell 28 per cent against the preceding quarter as well as 69 per cent compared with a year ago. Underlying approvals totalled £1.91bn; a 33 per cent (SA) decrease compared with the preceding quarter to stand 21 per cent down compared with a year ago.
Sector analysis: project starts
Private housing was the most active sector in Scotland for project-starts during the Q4 2022, accounting for 32 per cent of the total value. Despite this, the sector experienced a 50 per cent decrease against the previous year to total £245m. Further decline was prevented by a £64m , 403-unit development in Glasgow. Similarly, social housing project-starts fell 65 per cent compared with a year ago to total £60m, an 8 per cent share of the total value. Community and amenity experienced the sharpest decline of any sector (-89 per cent) against the previous year to total £6m.
In contrast, infrastructure experienced a strong poor period for project-starts, with the value increasing 138 per cent against 2021 levels to total £132m. Infrastructure was the second-most active sector in Scotland, accounting for 17 per cent of the total value. Growth was almost solely due to the ‘Vertical Launch Space Port’ development in Shetland. Health experienced four-digit growth compared with 2021 levels to total £52m, a 7 per cent share of the total value.
Value of project starts in Scotland during Q4 2022 by sector
| Sector | Value of Project-Starts (£m) | Change on previous year | Change on two years ago | %Share |
| Private Housing | 245 | -50% | -49% | 32% |
| Infrastructure | 132 | 138% | 229% | 17% |
| Education | 71 | -31% | -13% | 9% |
| Offices | 65 | 135% | 303% | 9% |
| Social Housing | 60 | -65% | -54% | 8% |
| Health | 52 | 2184% | -80% | 7% |
| Utilities | 47 | -72% | -88% | 6% |
| Industrial | 42 | -37% | -12% | 6% |
| Hotel & Leisure | 21 | -81% | -51% | 3% |
| Retail | 17 | -28% | -19% | 2% |
| Community & Amenity | 6 | -89% | -72% | 1% |
| Total | 758 | -40% | -51% |
Sector analysis: detailed planning approvals
Unsurprisingly, private housing accounted for the greatest proportion of detailed planning approvals (49 per cent) during the Q4 2022 with the value adding up to £985m. Despite its dominance, private housing approvals fell 11 per cent compared with the previous year. Social Housing, accounting for 7 per cent, also experienced a poor period with the value falling 70 per cent against the previous year to total £149m. Offices (-74 per cent), community & amenity (-84 per cent) and hotel & leisure (-91 per cent) all experienced sharp falls in approvals against the previous year to total £19m, £8m, and £22m respectively.
In contrast, industrial approvals increased 28 per cent against the previous year to total £347m. The sector, which accounted for 17 per cent of the total value, was boosted by the approval of a £36m manufacturing facility in Glasgow. 2021 levels. Education was another active sector that bucked the national trend, with approvals increasing 63 per cent against the previous year to total £193m.
Value of detailed planning approvals in Scotland during Q4 2022 by sector
| Sector | Value of Project-Approvals (£m) | Change on previous year | Change on two years ago | %Share |
| Private Housing | 985 | -11% | 19% | 49% |
| Industrial | 347 | 28% | 205% | 17% |
| Education | 193 | 63% | 25% | 10% |
| Social Housing | 149 | -70% | -76% | 7% |
| Utilities | 117 | -49% | -31% | 6% |
| Retail | 65 | 75% | 2% | 3% |
| Health | 61 | -9% | 40% | 3% |
| Infrastructure | 50 | -25% | -71% | 2% |
| Hotel & Leisure | 22 | -91% | -88% | 1% |
| Offices | 19 | -74% | -93% | 1% |
| Community & Amenity | 7 | -84% | 44% | 0% |
| Total | 2,015 | -27% | -23% |
Forecast construction starts for Scotland
| Underlying project-starts (£m) | Change on previous year | |
| Quarter 1, 2021 | 1,643 | 1% |
| Quarter 2, 2021 | 1,580 | 145% |
| Quarter 3, 2021 | 1,377 | 0% |
| Quarter 4, 2021 | 1,073 | 0% |
| Quarter 1, 2022 | 1,587 | -3% |
| Quarter 2, 2022 | 1,696 | 7% |
| Quarter 3, 2022 | 1,323 | -4% |
| Quarter 4, 2022 p | 653 | -39% |
| Quarter 1, 2023 f | 1,588 | 0% |
| Quarter 2, 2023 f | 1,586 | -6% |
| Quarter 3, 2023 f | 1,469 | 11% |
| Quarter 4, 2023 f | 1,266 | 94% |
| Quarter 1, 2024 f | 1,506 | -5% |
| Quarter 2, 2024 f | 1,463 | -8% |
| Quarter 3, 2024 f | 1,469 | 0% |
| Quarter 4, 2024 f | 1,360 | 7% |
Note: Underlying projects are schemes with a construction value of £250,000 to £100 million. Forecast updated in November 2022 p – provisional, f – forecast. Source: Glenigan
Glenigan – celebrating its 50th anniversary this year – is CN Intelligence’s partner for UK construction project data, market analysis and company intelligence.
Glenigan combines comprehensive information gathering with expert analysis to provide intelligence on all construction sectors, including private and social housing, education, health, hotel and leisure, industrial, infrastructure, offices, retail, and utilities, and across all regions of the UK and Ireland.
Find out more: www.glenigan.com
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