Scotland
Across Scotland overall, we anticipate workloads will steadily accelerate through a strong pipeline of new projects as the market continues to focus on sustainability and net zero goals.
While the detrimental impact of persistent UK and global uncertainty remains, together with industry-specific concerns of rising material costs, skilled labour shortages, and the impact of a complex and protracted planning process, there is optimism that anticipated interest rate cuts by the Bank of England this year may ease borrowing costs, strengthen investor and developer confidence, and reignite growth.
MARKET CONDITIONS & PIPELINE
Confidence that construction activity will rise tempered by caution over planning delays and skills shortages
The Scottish construction industry appears cautiously optimistic for the year ahead. While there is confidence within the market that overall workloads will rise, caution remains concerning the outlook for profit margins, with an overall expectation that they will fall during 2026.
There remains a continued focus on the refurbishment or repurposing of existing buildings, over the development of new-build solutions. This is partly driven by environmental priorities concerning embodied carbon but also commercial considerations arising from challenging and restrictive market conditions.
Although there are regional variations, planning procedures and timescales generally remain complex and protracted. The delay and uncertainty arising thereof continues to detrimentally impact confidence and meaningful project planning, ultimately jeopardising development.
It is imperative that the challenges arising from the worsening skills shortage continue to be addressed through government and industry-wide initiatives to encourage the next generation of young people into the industry while ensuring retention of those already employed.
RLB Market Activity Cycle
The RLB Market Activity Cycle is a representation of the development activity cycle for the construction industry.
RLB considers 10 sectors to be representative of the construction industry as a whole. Each sector is assessed as to which of three activity level zones – peak, mid or trough – best represents the current status of the sector within the cycle. This assessment is then refined by identifying whether the current status is in a growth phase or a decline phase.
The subjective current performance of sectors is identified by ascribing one of the coloured arrows (shown in the legend of the chart) to each sector. NB: In this analysis, sectors are not individually weighted.
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Market sector activity analysis: UK
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of multiple regions enables the calculation of a national representation of percentage of sectors in each phase of the cycle at a point in time.
Market sector activity analysis: SCOTLAND
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of a region enables the calculation of a regional representation of percentage of sectors in each phase of the cycle at a point in time.
TENDER PRICES
- Tender price inflation in Scotland is presently in the order of 3%, which is consistent with the UK national average. This figure is predicted to remain relatively stable throughout 2026 and beyond.
- Procurement routes in the Scottish market continue to centre around two-stage tendering, negotiation and framework agreements. There is little to no appetite among contractors for single-stage competitive tendering.
▉ RLB Scotland
▉ BCIS (National) TPI ▉ BCIS (GBCI)
▉ Competitors' range (High & Low)
INPUT COSTS
- The skills shortage within the Scottish construction market remains of concern as it continues to negatively impact construction costs and place increased pressure on project programmes.
- This concern is prevalent throughout the industry, with major shortages reported across all subcontractor trades, in particular bricklaying, as well as among construction professions such as quantity surveying.
SECTOR FOCUS
Commercial
The demand for commercial property in Scotland slowly increased towards the end of 2025 and the market remains cautiously optimistic that this will continue through 2026. The market reports a strong rise in occupier demand for office space as well as industrial space, with correspondingly optimistic rental expectations.
Infrastructure
Infrastructure workloads steadily continue to rise, with high demand being driven by a pronounced increase in activity centred around energy regeneration and distribution.
Retail
The demand for retail space has reportedly fallen with rental expectations predicted to decline in response.
CASE STUDY
The Macallan Distillery
RLB’s specification consultants supported the delivery of The Macallan Distillery and Visitor Experience, a project which won the RIBA Award for Scotland 2019 and was shortlisted for the RIBA Stirling Prize in the same year.
The Macallan is one of the most famous whisky makers in the world and its distillery, with a spectacular rolling roof that reflects the local landscape, offers a range of experiences for visitors.
JOIN OUR
PROFESSIONAL NETWORK
© Rider Levett Bucknall Limited 2026