How Brexit Could Affect the Construction Industry

Just like every other industry in the UK, Brexit has cast a shadow of uncertainty over those in construction. Whilst there is still a high demand for housing and commercial space – suggesting that construction is currently thriving – the Brexit negotiations still haven’t cemented any clear indication for the future of this industry, following the decision to leave the EU in 2016.

The main concerns are with the rising skills shortage, the importing and exporting of building materials and the maintaining of regulations and standards. Brexit certainly wasn’t favoured by those in the construction industry, with just 15% of construction professionals in the UK wanting to leave the EU. Here we take a look at the key concerns for the construction industry, how much of an affect Brexit could have and whether it is necessarily a bad thing.

Little Construction Workers Removing a Star from the EU Flag

Workforce

A key focus for many industries across the UK in the wake of Brexit has been the possibility of losing a lot of needed, skilled workers. The labour demand within construction is not being met by supply. Industries like construction have always benefitted from overseas workers, and the UK’s exit from the EU could significantly worsen the shortage of workers available for the industry.

Free movement of people to the UK is uncertain, and there is likely to be a knock-on effect of EU nationals leaving the UK of their own volition due to rising anti-EU attitudes. So, even if free movement is not affected, there is a likelihood of the UK experiencing a drop in the number of EU nationals available for employment.

Given the Government’s plans to let fewer low-skilled workers into the UK post-Brexit is a great cause for concern, as most tradespeople will be defined as such. Seeing as 1 in 3 construction firms employ migrant workers, it’s no wonder Brexit is a cause for concern.

Construction Helmets

Importing and Exporting

As members of the EU, the free movement of goods in and out of the UK to EU countries was guaranteed. With Brexit on the horizon, the UK could face duties and restrictions not currently in place that will affect our ability to import and export goods.

The UK relies heavily on importation from the EU. According to the Department for Business Skills and Innovation, the UK imported 64% of their building materials from the EU and exported 63% of building materials to countries within the EU. Brexit could see limitations on these imports and exports, leading to a potential shortage in materials or an increase in their costs. On the other hand, Brexit could open up the opportunity for the UK to negotiate its own trade agreements with countries across the world, such as China and the USA.

Houses Being Built

Regulations

Brexit isn’t necessarily all doom and gloom. For some in construction, it is an opportunity for the UK to take back more control over contractual risk and law clauses. Compliance across the UK is generally strong, and Brexit is not expected to affect this. However, some fear that our departure from the EU will lead to the removal of some of the regulations outlined by the EU, but this does not necessarily mean that all ties will be broken between the UK and the EU. Instead, the UK is likely to follow material and product standards.

Uncertainties

Brexit is certainly causing a stir in many industries across the UK, many sectors are nervous about the uncertainty of how their future will be affected. Many in the construction industry are preparing for worse to come in the next 12 months.

With recent political developments seeming to point to the Brexit conundrum being delayed even further, all these uncertainties are expected to continue. Whatever the outcome, Brexit is likely to shake the entire construction industry. Those in the industry should be planning for a worse-case scenario and putting contingency plans in place to protect their business operations.

Union Being Torn

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