The construction sector is finally feeling tailwinds after years of cost pressures, but sustained growth in Scotland can’t materialise without patience and strategic funding. 

After a challenging period partly driven by unprecedented cost inflation, there are now more encouraging signs from the sector, making now a good time in the cycle for companies to consider taking on investment. Those across the whole spectrum of the construction sector can prepare for growth and, in our experience, this means having the right strategy, the right people and, critically, the right funding. 

The structural undersupply in housebuilding has been well-documented, but the recent spending review recognised the need for long-term investment in the UK’s much broader infrastructure – be that private or affordable housing, transport and of course the re-wiring required as part of the broader energy transition. Combined with a desire to unclog the planning system, it is a more positive backdrop than the sector has seen since 2020, even if reforms will take time to work their way through.

There are some fantastic Scottish companies that cover this spectrum, from ITPE and Soben at the front end of the cycle (both had successful sales in the last 18 months), through housebuilders such as Springfield Homes, to building products companies like Window Supply Company, and then specialist contractors like Boxergy.

But not every investor is naturally suited to the sector. It requires strategic patience, strong networks and sufficient funding to set businesses up for success. For those seeking investment – these capabilities, combined with the ability to take a long-term view and invest through the cycle, should be key considerations.  

Different parts of the sector will inevitably feel these tailwinds in various ways. Hotspots include planning and design work for the grid connections necessary to unlock onshore and offshore wind, affordable housing, and managing the post-Grenfell world of much tighter focus on fire safety.

As a result, I am speaking to businesses across Scotland about what more ambitious plans could look like, and many of those conversations develop into how they can be funded – be that from within the business or new third-party capital.

At BGF, we see construction as covering the full project lifecycle – from design and planning, through the build phase and then into ongoing maintenance. Overall, this is an £11 billion market in Scotland, supporting over 200,000 jobs. 

We know it’s not all plain sailing though, and there continue to be casualties amidst thin margins and fragile supply chains. At the same time, the growth we are all hoping for will spotlight gaps in people and skills – with many companies concerned that this will quickly be the bottleneck.

BGF – with over £2.5bn of evergreen funding firepower and established expert networks – can take a long-term view. We have a track record of partnering with successful businesses across this market – Campion Homes and Stevenswood for example in Scotland, and over twenty others across the UK.

There is plenty to be optimistic about in key parts of Scotland’s construction sector, but growth can’t be taken for granted. The right funding, from the right investor, is often the missing ingredient that turns potential into reality for companies.