2013 is set to be a challenging year for construction in Scotland, according to the Royal Institution of Chartered Surveyors (RICS).

24% of surveyors who took part in a regular RICS survey said orders from the public sector had fallen.

95% of surveyors the industry is suffering from financial constraints, while two-thirds cite lack of demand.

Some surveyors are concerned uncertainty over the independence referendum in 2014 is holding back investment from the private sector, according to RICS.

David Taylor, from Glasgow-based chartered quantity surveyors CBA, said: "There is some sign of greater activity but there is still a general lack of confidence in all sectors.

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"Funding continues to be an issue, with bank funding almost disappearing."

David Cation, from Charles Henshaw and Sons in Edinburgh, said he believes the prospect of the referendum in 2014 is "holding back investment from the private sector".

Ailsa McGregor, of McGregor Business Consultancy, added: "Government economic and fiscal policies need to change from solely cost reduction to transformational, to provide incentives for investment in property/service industries and improve availability and access to funding streams."

RICS Scotland director Sarah Speirs said: "After a disappointing few months the sector is still struggling with the continued decline of reported workloads.

"Critically, competitive pressures in the sector remain intense, which is continuing to erode profit margins.

"For the time being, financing constraints are still an issue, however, the Scottish Government announcement in autumn of an additional £394 million being made available for capital building and infrastructure projects in Scotland should aid growth in the sector."

(IT)