The new government has provided greater clarity to Scotland’s construction market, with much hope resting on anticipated legal reforms, planning changes, and new procedures and processes. A new national planning hub – set to launch this year – aims to accelerate the approval process for new housing developments, addressing long-standing delays.

There is a strong pipeline of construction work and projects across the country, with significant growth in retrofit projects along with greater innovation in sustainable housing solutions.

The launch of the Construction Pipeline Forecast Tool, developed by the Scottish Futures Trust in partnership with industry and public sector bodies, provides a look forward as to the anticipated public sector spend within construction. This tool provides long-term visibility into future projects, allowing businesses to plan and resource accordingly.

Despite these positive developments, the skills gap remains a major challenge. Scotland requires over 26,000 additional construction workers over the next five years to meet industry demands and sustain growth.

RLB’s tender price forecast for Scotland over the next 12 months is for a rise of approximately 3%, with a steady annual rise of 3% expected in 2026 and beyond.

•   Movements in the cost of materials have been generally in line with trends being currently experienced in the rest of the UK.
•   The ongoing shortage of skilled labour in the Scottish construction industry will inevitably increase pressure on costs.

The commercial property market is being heavily influenced by the demand from organisations to provide best-in-class facilities in order attract employees back into the office. This makes quality construction and design all the more important along with stringent monitoring of projects.

Scotland is positioned as a prime location for data centre development, thanks to its clean energy surplus and strong grid connectivity.  The sector is experiencing rapid expansion, with competition intensifying to build new infrastructure.

The logistics and manufacturing sector remains a stand-out performer in Scotland as rents continue to be competitive compared to other areas of the UK. There is still strong growth potential along the M8 and M74 corridors. 

The industry is hopefully for long-term government funding commitment long-term to accelerate the development of affordable homes. If these are to meet the Scottish equivalent to the Passivhaus standard, the industry will have to work with the government and stakeholders to balance costs and environmental design.

RLB partner, Scotland, Martin McConnell, said: “Scotland’s construction sector remains buoyant, with strong performance in key areas such as energy, data centres and manufacturing & logistics. The push for improved housing quality and quantity of housing stock reinforces the positive outlook.

“Whilst underlying material input costs have been easing, the industry has a skills shortage and badly needs investment in skills to replenish the workforce in the longer term. Tender price forecasts remain relatively stable for the short term, but with a latent capacity in the market, any changes in output will likely result in revisions to the tender price forecasts.”