Press & Policy

There is no shortage of potential in Scotland’s construction sector.

Recognising the ongoing housing crisis, the Scottish Government has committed to delivering 110,000 affordable homes by 2032. Meanwhile, the pipeline of nationally significant infrastructure projects continues to grow, from HMP Glasgow and the A9 dualling programme to the billions of pounds of investment needed to modernise Scotland’s electricity network and deliver the energy transition.

Why, then, does SCC’s latest data show that confidence across the sector fell to its lowest level in a year (-22%) in Q2 2026?

Part of the answer lies in the widening gap between what Scotland needs to build and what is being delivered. Major projects have too often become associated with delays, rising costs, and shifting timetables, while firms continue to wait for a sufficiently reliable pipeline of work.

The market reinforces that point. RLB’s latest analysis highlights planning delays, labour shortages and cost pressures continuing to weigh on Scotland’s construction market, even as inflation begins to stabilise.

Scottish Chambers of Commerce has tracked conditions across the construction sector for over a decade, providing an important measure of confidence, demand and investment across the wider economy.

Our latest survey points to three key factors weighing on sector confidence.

First, the promise of significant work in the medium term is not enough to sustain firms today. Capacity use fell to 60%, its lowest level since Q2 2020, suggesting many businesses have the equipment and expertise to take on more work but are not seeing enough projects progress at the pace required.

Construction businesses invest in people, equipment and apprentices long before projects begin. Without confidence that work will materialise, those investment decisions become harder to justify.

Business experience underlines that point.

A small West Lothian construction firm told us:

“Construction appears to be holding up, but clients are taking longer to progress projects. Competitor pricing may also be falling as firms compete to win work.”

Elsewhere, a medium-sized firm based in Inverness pointed directly to the delivery system:

“Developers continue to face significant planning difficulties and delays, creating risks for projects and the businesses that rely on them.”

The housing sector illustrates the challenge. Scotland remains in a housing emergency, yet Savills estimates housing completions fell by 13% last year, while Homes for Scotland reports that the number of SME housebuilders has fallen to its lowest level in two decades. Those firms overwhelmingly identify planning delays as a major barrier to delivery.

This is increasingly a challenge for Scotland’s competitiveness as well. Investment, developers, and skilled workers will not wait indefinitely for projects to move slowly through planning, consenting, and procurement.

Second, skills shortages are becoming more acute. Skills Development Scotland estimates that the sector needs another 10,000 people by 2028 to meet expected demand. Once those leaving the workforce are considered, that requirement rises to around 25,300 people.

Yet six in ten firms told us they were experiencing difficulty filling vacancies, the highest level recorded in over a year.

Businesses report spare capacity while simultaneously struggling to recruit. That points to a structural skills challenge, particularly in the specialist trades needed to deliver housing, infrastructure, and the transition to net zero.

Finally, high costs continue to restrict the ability of firms to invest. The triple-whammy of labour, material, and energy costs are continuing to place significant pressure on the sector.

A large Ayrshire firm summed it up:

“Projects that should already be on site are being delayed, while rising steel prices are adding significant costs to larger schemes.”

Construction firms across the country have the ability to deliver, yet confidence is weakening because the route from political commitment to shovels in the ground remains fraught with delay and uncertainty.

That is why SCC’s Plan for Growth calls for a National Infrastructure Acceleration Plan to identify nationally significant projects, remove barriers to delivery and provide businesses with a visible, investable pipeline of work.

Alongside faster planning and consenting decisions, closer alignment between infrastructure investment and skills planning will be essential if Scotland is to deliver the homes, transport links and energy infrastructure it needs.