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How has COVID 19 affected Construction and Property Job Prospects in Scotland?

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This survey was carried out by thePotentMix, an independent third party, on behalf of Peace Recruitment, between 12th and 30th May.  Some 587 companies on the Peace client database were sent the survey and further responses came via posts on the Peace social media platforms.  

There were five questions, all of which allowed for comments, plus there was a further opportunity for participants to add a final, additional comment. Over this period, the Scottish Government made its long-awaited announcement about removing some of the restrictions and allowing construction to restart, so some of the comments reflect the respondents’ frustrations before that announcement was made.  There were only a few additional comments and none at all on Qs 1 and 4.

Executive Summary

  • The vast majority (77%) ranked the impact of the crisis above the median point in the scale they were given.  Over a quarter scored their firm at 10 - the worst possible impact.
  • The vast majority (85%) expect their profit to decline by over 20% this year.
  • A small majority, 56%, do not expect to make redundancies.
  • Only 5% said the expected a return to normal hiring.  59% were pessimistic about hiring in the rest of the year.
  • A majority (70%) said they believe they have been able to put in place the necessary conditions for a safe return to work.

 

The following pages show the detailed results from each question. (FOUR-FIVE MINUTE READ)

Q 1. On a scale of 0 to 10, where 0 is no impact and 10 is a huge impact, how has the global pandemic affected your business?  Add a comment in the text box if you wish.

The severity of the impact is striking.  Only 11% of respondents said the crisis had had a moderate (i.e. less than 5 on our scale) impact; 12% said it has a middling-level impact (i.e. 5 precisely on our scale) and 77% said it was bad-to-terrible.  Significantly, over a quarter (26%) scored this question at 10 – a huge impact.

Q 1 graph

Q 2. Do you expect your business profits to drop by more than 20% in 2020?  Add a comment in the text box if you wish.

Only 15% of our respondents did not expect their profits to drop by more than 20% this year.  In other words, the vast majority of construction/property firms are going to take a big hit, with all that implies for future investment and jobs.

Q 2 graph

Comments

“Across all business units yes, although our unit is a not for profit vehicle.” 

“Product type and price as we have a different customer expectation.” 

“Reduction in fee income will exceed this.”

 

Q 3. Are you expecting to make redundancies as a result of the crisis?  Add a comment in the text box if you wish.

This is perhaps the major chink of light in this survey.  Despite the prognostications of gloom revealed in the answer to Q. 2, a small majority, 56%, said they do not expect to make redundancies.

Q 3 graph

Comments

“Too early to tell.”

“At stage it is too early to predict this. Key will be the economic recovery plan of Scot /UK Gov.”  

“Hopefully we can weather the storm.”  

“Not at present.”     

“Self Employed.”

“Not as a direct result, but more likely following the ending of the furlough scheme and possible recession.” 

“We have new sites opening in the East Division and have just started NCH with planning permission for 2000 units with 275 units for HA.”

“At present we have no redundancies planned at present, however it will take some time to recover and the impact this will have in the long term is currently an unknown.”

“Not certain yet.”

“Not at the moment but depends on construction sites re-opening.”

Q 4. On a scale of 0 to 10, where 0 is no chance of hiring new staff and 10 is a return to normal hiring, what is the likelihood of you hiring staff in 2020.  Add a comment in the text box if you wish.

Although not quite as emphatic as the response to Q. 1, there is, once more, a large majority for the more gloomy scenario of very few jobs being available as we come out of the crisis.  Nearly a quarter (24%) expect to hire no-one.  Some 59% were below the median of 5, with 15% giving their response as 5 (i.e. 50:50) and only 26% showing confidence, of which only 5% said the expected a return to normal hiring.  

Q 4 graph

Q 5. Do you feel your business is properly prepared for the ‘new normal’ (social distancing, work from home, health and safety)?  Add a comment in the text box if you wish.

Here, perhaps unsurprisingly, a majority (70%) believe they have been able to put in place the necessary conditions for a safe return to work.

Q 5 graph

 Comments

“Working on it such that we will be prepared.”

“We have a plan in place however on the job assessment is required.” 

“We have prepared as best as we can, however we can only implement our plans safely and successfully with full co-operation from site operatives and contractors.” 

“Not fully but we will be by the time we can go back.”    

“It depends on what the rules actually are.”

 

Q 6. Please feel free to add any other brief comment about how you see construction coming out of the pandemic.

This question was simply to solicit some additional information.  There were relatively few responses, all of which are shown below.

Comments

“Many projects will be delayed or cancelled as business investment priorities are understandably focused on recovering rather than expanding.”

“Lack of clarity from scotgov. Answers needed so construction can restart.”    

“We just need to get back to tools and working. We have planned and planned, have PPE in place and are losing contracts to England already.” 

“Going forward will be difficult trying to maintain social distancing and achieving effective production. Range of trades and abilities, mentality and intellect is going to be difficult keep all workers safe. Hygiene is not the first priority in the construction industry and this needs a culture change.” 

“Very slowly, limited resource required but all depends on sales of new homes.”

“Like the financial crises of 2007-2009, the smaller companies should thrive and employ, whereas the larger companies, with dividend obligations will be likely to make cuts to limit costs. Our order book is significant and we have been bidding for a significant amount of work.”    

“There will be an initial flurry to complete the plots that are at an advanced stage. I feel that we will see the real damage that this pandemic has caused during August and September.”   

“Let’s go.”

“Extremely challenging times and AB uncertain market.”

“Slow but will adjust, Good feedback from our English regions who have new covid-19 guidelines in place and with 900 sales during the lockdown not too terrible.”

“The longer the lock down lasts the greater the impact to our business.” 

“Companies just need to get on with it. Get staff back to work ASAP.”   

“The Scottish government needs to act to open up the construction sector in Scotland.”

“I worry that clients will drive contractors and suppliers back to work without adequate precautions and preventative measures in place.” 

“Sharp bounce back in Q4.”

“Slowly in Scotland, some opportunities will present themselves which were not there before due to the impact of the pandemic.”

 

Chris Peace, MD, Peace Recruitment

 

 


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