It is coming up to three months since the EU referendum has been announced and that Britain will be leaving the European Union in the coming years. With the construction industry being a very prominent one in the UK that generates millions of pounds, there is a big question being asked and that is what does Brexit mean for the construction industry?
There are three main areas that will be affected by the exit from Europe and they are: Labour, materials and investment:
Labour
It is expected that Britain will leave the single market, which will end freedom of movement for workers across the European Union. In the UK, government figures show nearly 12% of the industry’s 2.1m workers come from abroad– mainly from the EU. According to the CIOB, the industry will need to find an additional 224,000 new recruits by 2019 to meet the overall pipeline of work. This is all long term and it is worth mentioning that the short term not much will change on this front. With a skill shortage before the Brexit vote, the construction industry where charging £25 an hour for a brick layer in London and that can increase with the shortage of skilled workers increasing.
Materials
As predicted the value of the pound fell dramatically when it was announced that Britain was leaving Europe. A fall of more than 10% and a low not seen since 1985, it’s not great for trade especially when you consider that the construction industry imports 64% of its materials from Europe. This coupled with the pressure from employee wages could be fatal to companies.
Investment
Most analysts are predicting that investment will drop since we have left the EU, especially in the commercial construction sector. With such uncertainty now surrounding the economy, certainly European investors are likely to be put off by an economy that has taken a turn for the worse and has no true prediction of when it will get back on its feet.
What do you think of the effect that leaving the European Union has had on the construction industry?
