I’ve been speaking to people in Scotland’s building materials industry, and the mood is grim. Not panicked, but genuinely concerned. They’re describing the situation as ‘death from a thousand cuts’; it’s not one catastrophic blow. It’s a steady accumulation of pressures that’s grinding away at margins and viability.
What are these pressures? Start with energy costs. Manufacturing is energy intensive. Scotland’s energy costs have been high for years, but they’re rising again. That makes Scottish production less competitive than European competitors. Then add in raw material costs. Cement, aggregates, steel; all up.
But it’s not just costs. There’s regulation. The Scottish Building Standards are evolving, especially around energy efficiency and sustainability. That’s good policy; buildings should be better. But it means manufacturers have to adapt their products. That costs money. And if the market size doesn’t grow to absorb those costs, manufacturers squeeze their margins.
Then there’s market size. Scotland’s construction industry is steady but not booming. Housing demand exists, but house building hasn’t accelerated. Some commercial work. But nothing explosive. If you’re operating at 70% capacity and paying high fixed costs, that’s not sustainable.
The industry’s making a case to Scottish Government for support. They’re arguing for energy price interventions, maybe grant schemes for product adaptation, tariff protection. These aren’t unreasonable asks; other countries support their manufacturing sectors.
But here’s the reality: Scottish Government’s budget is tight. They’re making choices about priorities. Manufacturing might not be the highest priority right now. That’s the political economy of the situation, and it’s brutal for firms that make things.
I think this matters because Scotland needs to make things. Jobs that aren’t in services. Exports. Building materials manufacturing is part of that story. If it’s lost because it couldn’t be supported through a difficult period, that’s a genuine loss.