The Impact of Brexit on the Construction Industry
Whichever side of the referendum vote you fell this year, there is no shying away from the fact that it will have a huge bearing on the way the UK operates in future.
Figures released at the end of October showed that the economy had grown by 0.5% in the time after the vote. This figure is slightly down from the previous 0.7%, but was not quite as bad as had been forecast.
How has Brexit affected the construction industry?
So far, with the country on edge about how things will proceed, on the surface very little seems to have changed. It’s only been a few months since the result was announced and Prime Minister Theresa May has not yet fully outlined what the plan is once Article 50 has been triggered.
With the new figures out for the latest quarter, what has happened to the construction industry? The answer is that, despite an overall positive for the country, construction contracted by 1.4% with manufacturing down 1% and industrial production down 0.4%.
These figures don’t look good, with the services sector seemingly carrying all the weight. But even still, there are some positives.
Are there any positives to take away from the figures?
To say “it’s not as bad as predicted”, feels like a bit of a negative in and of itself. However, given the doom and gloom pitched to people in the run up to the referendum, you’d have to say that things are still pretty steady in the UK.
It’s still too early to say exactly which scenario will play out for the construction sector, with some projects paused – such as the Bishopsgate development in London – and many still going ahead. Major developments such as Hinkley Point C and the HS2 rail projects might see delays, with a drawn out, political saga only likely to shake confidence.
In the best-case scenario, housebuilding and the confidence of people buying new homes will be a huge factor. Many developments are already underway and their completion will hopefully be a boost to the sector.
Is Brexit really the biggest challenge facing construction?
The results after the referendum didn’t seem to shake the construction industry as hard as some might have thought. That doesn’t mean the sector doesn’t have other issues to combat however, with some commentators saying the true challenge lies in skills for the sector.
Having a variety of skilled people easily available to developers means a steadier project and a better quality end-product. With one of the key battlegrounds for the referendum being the level of immigration, losing out on talented workers from the EU – especially where the UK is so chronically lacking – spells trouble for the future.
That being said, we once again come back to the lack of detail in the Conservative government’s exit plans. Should we still be tied to the EU’s rules on immigration in order to access the valuable market, skills may not be such an issue.
We could do more as a country ourselves though, with apprenticeships being more popular than ever, allowing young people to gain skills valuable for our industries while earning.
So the verdict is still out on what the long-term impact of Brexit will be on construction, but for the short term things aren’t quite as bleak as some imagined. The country is finely balanced right now, requiring a prompt but positive exit negotiation to see core industries flourish.
At Elsons, we provide a great range of building and construction materials and tools in St Albans and Hertfordshire. No matter what kind of construction or development project you’re involved in, look no further than Elsons for your supplies.
Contact our friendly team today or pop down to our site for more details – we’re always happy to assist you in finding the right tools and materials for your requirements.