One of Britain’s leading tool hire companies has warned that the uncertainty surrounding the Scottish referendum has stalled construction activity north of the border.
Speedy Hire, which rents out equipment from diggers and power generators to scaffolding, is a bellwether for building activity in Britain.
It says that, despite strong growth in London and regional centres such as Manchester and Birmingham, its Scottish business has registered a double-digit decline in revenues.
“The impasse around independence is having a knock-on effect,” Mark Rogerson, chief executive of Merseyside-based Speedy, told the Financial Times. “Nobody’s investing, nobody’s building.”
The warning from the London-listed equipment rental group comes after a leading consultancy warned that billions of pounds worth of construction projects would be at risk if Scotland voted to leave the UK.
Barbour ABI, which has more than 80 years’ experience in built environment research, said last week that protracted post-referendum negotiations between Edinburgh and Westminster following a Yes vote would put about £8bn of ventures in jeopardy – about a fifth of the nation’s planned construction works.
While most of the pre-referendum comments from businesses such as Royal Bank of Scotland and oil group BP have largely warned of the theoretical effects of a Yes vote, Speedy’s comments illustrate how referendum uncertainty is having a direct impact on business in Scotland.
Speedy said its revenues were down 15 per cent year-on-year in Scotland – a country that accounts for a tenth of the company’s sales.
That contrasted with Manchester – up 19 per cent year-on-year – London, up 20 per cent, and Birmingham, up 6 per cent. “There are tower cranes everywhere across Liverpool,” added Mr Rogerson. In Scotland, only Aberdeen, where a new bypass is being built, is seeing work, he said.
Other construction groups are experiencing a similar slowdown in Scotland. “A lot of development work that we’ve been involved with has been on hold,” said one leading multinational contractor. “Even if it was a No, again, there would be a lot of discussion as to whether things would go ahead. There’s a lot of waiting and a general ‘holding-back’.”
Alastair Stewart, analyst at Westhouse Securities, said commercial property investors appeared to have been “sitting on their hands” and waiting for the result of a referendum when the outcome was expected to be a No. “But in recent weeks, as the polls have narrowed and then reversed, we have been hearing that both the commercial and residential markets have virtually ground to a halt,” he said.
Speedy’s Mr Rogerson also warned of the extra burden of a Yes vote on small to midsized enterprises.
“What most small companies are worried about is, what’s the extra load on us?” he said. “Do I need another auditor in Scotland, which will come at a cost? Do I need another banking structure?”
He added that the uncertainty surrounding the vote and its aftermath would have dire consequences for the Scottish economy. “With that interregnum going on, not only is there going to be no investment. There’s going to be an outflow of economic strength.”
Speedy pointed out that the decline in Scotland was being more than offset by growth elsewhere, and that its forecasts for the full-year remained unchanged.