Between a Rok and a hard place

By Steven McKenzie
BBC Scotland Highlands and Islands reporter

Image caption,
Plans for Scotland's Housing Expo were disrupted by the economic downturn

The construction industry is one of the cornerstones of the Highlands economy.

Three years ago, almost every part of the region's capital, Inverness, seemed to have a building site.

In 2007, construction staff accounted for 7.1% of employed people in the Highland Council region.

The house building boom at that time led to Inverness being dubbed the fastest growing city in the UK.

But hard times lay ahead and the past 18 months have been described by one construction firm boss as the "toughest the industry has ever experienced".

The economic downturn in 2008 brought the first swing of the wrecking ball to the building trade.

According to Highland Council figures, the number of housing projects completed by builders in the area that year fell compared to 2007.

The local authority reported 1,471 new homes were completed in 2008, compared with 1,806 in the previous year.

The council said this was the first significant drop in housing completions in the Highlands since 2001.

From economic downturn, the UK slid into recession.

Scotland's Housing Expo - a development built on the outskirts of Inverness showcasing innovative designs - was postponed in 2009 until August 2010 to allow the housing market to recover.

In June this year, 77 staff lost their jobs at Highland Quality Construction (HQC) after the company was placed into administration.

HQC specialised in road building and had an annual turnover of £20m.

'Put off'

Later in the summer, David Sutherland, of Inverness-based Tulloch Homes, warned that fears over public sector cuts was harming the north's recovery from the recession and affecting the housing market.

He said: "If you announce a big cut in public services and say you are thinking about it but we will come back to you in October-November, well, people will be put off buying because they are worried about their jobs."

A chill wind has continued to blow through the industry in the final months of the year.

Within the first days of November, Exeter-based construction firm Rok confirmed it was in administration.

Hundreds of staff employed in the Highlands and elsewhere in Scotland are losing their jobs.

Last month, Highlands and Islands Enterprise (HIE) signed a four year contract worth £32m with Rok to work on a number of construction projects.

The work included the upgrade of a fabrication yard near Stornoway on the Isle of Lewis which is being upgraded to handle renewable energy work.

'Challenging conditions'

Rok is also contracted to redevelop a former military air base, Machrihanish in Argyll, into a site for manufacturing wind turbines.

The troubles afflicting the industry have led James Pedrana, chief executive UBC Group, to describe them as the worst ever experienced by the industry.

He said: "While we may be business competitors we are all facing seriously difficult trading conditions, and the news of Rok and the restructuring which so many companies are being forced to undertake is symptomatic of the challenging conditions in which we are currently operating."

Mr Pedrana added: "In my opinion the past 18 months have been the toughest the industry has ever experienced, and we understand that recovery is still some way off."

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