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Blog 04/02/2019

Brexit presents opportunities for the construction industry

Incomplete Jigsaw - Brexit

You’re probably fed up with the Brexit debate taking over the news channels and all forms of social media and face-to-face debate. Will Britain leave? Will there be a deal or no deal? Will there be a so-called People’s Vote? All, amazingly, remain unanswered despite the break-up deadline being weeks away.

What is certain is that, unless things remain as they are, there will be some sort of impact on the construction industry. However, it’s not all doom and gloom. In fact, there are some upsides for the businesses involved in building and their employees.

And that means if you’re a graduate of, for example, civil engineering, you’ve still got a bright future ahead of you. If anything, you’ll have more opportunities than ever.

In this article, we’ll look at the key areas that will impact the construction industry after Brexit. While some might be negative, there’s a lot of good things to highlight, too.

 

Availability of labour

The construction industry leans heavily on labour from the EU. In fact, there is already something of a skills shortage, so any seismic split from Europe would be seen by some as catastrophic. After all, according to the Office of National Statistics, nearly a third of non-skilled workers on London construction sites are from the EU.

However, a split from Europe after March this year will not mean all the workers suddenly get kicked out. Those Europeans already living and working here will be welcome to stay. Those wanting to move here in the future will have to go through a visa system for entry. While that’s more burdensome than the free movement of labour within the EU, it does not exactly present the impossible. Plenty of Brits move to Australia or America using a visa system, for example.

As for highly-skilled jobs within the sector, they’re well rewarded and so suitably qualified EU workers will make every effort to acquire the correct paperwork.

What does all this mean for graduates coming out of university with degrees in, for example, civil engineering? Well, unless the industry collapses, which nobody is predicting, things are better than ever. Any pressure on the supply of skilled construction jobs simply drives up demand. So, if you’re leaving university, that increased demand, in a market that already has something of a shortage, means you’ll have your pick of great opportunities.

 

Movement of construction materials

Like so many of the Brexit debates, you can twist just about any argument to suit your point of view. The truth is no-one really knows what impact Brexit will have on so many areas of our lives. And it’s that element of the unknown which some say is the most damaging of all.

However, perhaps there’s a lesson we can learn from the markets, which do not currently appear flustered by what others call the biggest political crisis of a lifetime. The pound is stable, the FTSE bobbling along as if saying: “There’s nothing to see here.”

In the case of import and export of construction materials, one side says there’ll be chaos; the other side says it presents a huge opportunity for wider British business. Back in 2010 a report by the Department for Business Skills and Innovation stated 64% of our construction materials were imported from the EU. Surely, say the critics, this is proof that restricting the movement of goods from Europe will have a major impact on the UK construction industry?

But hang on. The same report confirms 63% of the building materials made in the UK are exported to the EU. Now, it doesn’t take much to work out that Brexit means one of two things: 1 UK construction sites will buy more of their materials from UK suppliers, 2 They will maintain relationships with EU suppliers and accept slightly longer delivery times and perhaps a small added financial cost. What we can guarantee will not happen is that building sites will suddenly find they have run out of supplies, so down tools and go home.

If Brexit goes ahead, Britain will be free to negotiate its own trade agreements with other countries, including the EU.

 

Red tape

Prominent leave campaigners are sure there will be less red tape. And complicated procurement regulations for construction firms will ease if we’re not joined at the hip with Europe. Take Lord Bamford, the chairman of construction giant JCB, who insists Brexit will reduce the cost of bureaucracy, and that could cover any increase in materials costs for the industry.

No-one argues there will be a period of uncertainty. Regulations will change and need to be adopted by businesses in every sector.

But the good news is, this will not have a serious impact on the industry or those graduates looking to start out in construction. Jobs will be plentiful for those new-starters, just as they will be for those wishing to move from one employer to another.

 

Big-ticket infrastructure projects

Larger, high-profile construction projects like HS2, or major road-building, might be impacted in some way by Brexit. Currently, as a member of the EU, Britain enjoys access to the European Investment Bank and the European Investment Fund, which invested billions and hundreds of millions of pounds respectively in infrastructure projects across member countries.

If Britain misses out on this funding route in future, then it remains to be seen if the Government will step in and plug the gap.

What we do know is that during hard times previously, big building projects are precisely what the Government does like to back. It provides direct employment and there are significant knock-on benefits for UK suppliers and the local economy.

 

So, it’s not all doom and gloom, then?

No! Clearly, we’d all like more clarity about how (or even if) Britain leaves the EU. It’s the uncertainty that unnerves everyone. If we had facts, then the arguments of the past two years would have been more clear-cut.

The point is that the construction industry in the UK is robust. The Government needs it to be and will support it. There may be a short-term period of change, but there are blue skies ahead, whether we pull out of the EU or remain.

Discuss opportunities and concerns with our team of specialist consultants today.

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Tags: Brexit Civil Engineering Opportunities

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