RLB Scotland Reports Positive Outlook for Construction Sector

The latest Construction Market Intelligence (CMI Q1 2025) report from Rider Levett Bucknall (RLB Scotland) highlights renewed confidence in Scotland’s construction industry. Project starts have increased slightly from the previous quarter, signaling a steady market recovery amid anticipated legal reforms and infrastructure improvements.

Government Reforms Provide Clarity

The arrival of a new government has injected fresh optimism into the sector. Industry experts are closely watching proposed legal changes and planning reforms, which could streamline development approvals and accelerate stalled projects.

A national planning hub set to launch this year aims to:

• Speed up the approval process for new housing developments.
• Reduce long-standing bureaucratic delays.
• Improve coordination between public and private sector projects.

Strong Pipeline of Projects

Construction activity remains robust, with a growing focus on retrofitting older buildings and implementing innovative sustainable housing solutions. Public sector investments, supported by the Construction Pipeline Forecast Tool, are expected to provide businesses with better visibility on upcoming projects.

Scotland’s demand for construction workers remains high. Industry estimates suggest that over 26,000 additional workers will be needed over the next five years to meet projected demand.

Cost Pressures and Market Trends

While material costs remain aligned with broader UK trends, the shortage of skilled labor is expected to keep construction costs rising. RLB projects a 3% increase in tender prices over the next year, with steady annual growth of the same rate expected into 2026 and beyond.

The commercial property sector continues to evolve as businesses strive to create attractive workspaces that encourage employees back into offices. Developers are focusing on:

• High-quality construction and design.
• Improved workplace amenities.
• Stricter project oversight to maintain quality and efficiency.

Data Centers and Manufacturing Expansion

Scotland is emerging as a prime location for data center development, thanks to its clean energy surplus and robust grid connectivity. Competition is heating up as developers seek to capitalize on growing demand for digital infrastructure.

Logistics and manufacturing remain key growth areas. Rental prices along major transport corridors, including the M8 and M74, remain competitive compared to the rest of the UK, further driving investment in these sectors.

Affordable Housing and Sustainability

A long-term commitment from the government to fund affordable housing remains crucial. If Scotland aims to meet its proposed Passivhaus-equivalent building standards, collaboration between the government, developers, and industry stakeholders will be necessary to balance costs with sustainability goals.

Martin McConnell, RLB Partner for Scotland, stated: “Scotland’s construction sector remains buoyant, with strong performance in key areas such as energy, data centers, and logistics. The push for higher housing standards reinforces the industry’s positive trajectory.”