The Impact of Brexit on Construction (2018)

Regardless of the constant debate regarding Brexit, the fact remains that the UK will be leaving the European market spring 2019.

It’s a bold move and one which is laden with plenty of uncertainty; accordingly, many UK industries are experiencing a surge in anxiety regarding the potential fallout of this break from Europe. In particular, the bustling UK construction market – with a workforce rich in European workers – is set to experience a number of changes, so let’s take a look at the probable impact.

The Main Concerns of Leaving Europe

There are a number of unique negatives which are set to affect the UK’s construction industry and these are:

• Reduction in EU Workers: The Royal Institution of Chartered Surveyors estimate that up to 175,000 EU workers could be lost due to Brexit restrictions. This equates to roughly 8% of the industry’s workforce and promises a significantly negative outlook for the industry. Whilst this obviously presents opportunities for UK workers, the amount of training required to fulfil 175,000 vacancies will take time and this threatens to bring many major projects to a standstill.
• No Protection from Dumping: Certain sectors of the UK construction industry face the lifting of anti-dumping policies which impose strict pricing policies to deter foreign imports. A case in point is the European tile industry which is currently protected by EU tarrifs that ensure, for example, Chinese tiles are unable to price local manufacturers out of the market. With the UK leaving the EU, though, this puts the 6,000 workers involved in the UK tile industry at a real risk of losing their jobs.

The Benefits of Brexit for UK Construction

Whilst the potential concerns raised by Brexit are troubling, there remains hope that a number of benefits will spring up such as:

• Reduction in Prices: If the property market experiences a drop in investment due to Brexit then this isn’t necessarily as catastrophic as it sounds. In fact, with investment moving abroad then it’s increasingly likely that the cost of land in the UK will drop and, most interesting of all, huge banks of derelict land are likely to become available due to the potential interest in home grown construction projects.
• A Drastic Cut in Red Tape: One of the major selling points of Brexit was that the UK was beholden to the bureaucratic red tape of the EU, so leaving the EU was the best option for the UK to regain control of its activities. And many major players in the UK construction industry have welcomed the impact of less red tape with Lord Bamford – chairman of JCB – stating that more than half of Britain’s trade takes place with non-EU nations and that EU red tape is strangling UK business.

Impact of Brexit on Construction: Final Thoughts

It’s difficult to tell exactly what the impact of Brexit will be on UK construction, but it’s obvious that it will send ripples through the industry. The most pressing concerns are the reduction in available labour and the impact of pricing policies on overseas materials, but these are likely to be countered somewhat by the freedom afforded to UK policies by the break with Europe.

Ultimately, it’s up to the UK construction industry to negotiate beneficial investment deals and weather the initial storm of change.