Prior to the referendum on June 23rd, only 15% of construction and property executives in the UK were in favour of an exit from the European Union. This is unsurprising given the potential impacts that Brexit will have on the construction industry. Whilst the vote has been passed, negotiations are still ongoing, meaning that the future of Brexit and the exact nature of the trade deals to be made with the EU are still unclear. At this point it is possible to examine the potential future of the construction industry, now that Brexit is unavoidable.
A knock on effect
The construction industry accounts for around 10% of total employment in the UK, meaning that the Brexit impact will have a knock on effect for the rest of the economy, and households across the country.
Access to labour will be a key issue, which pivots on the decisions made on freedom of movement and labour between the countries. Skilled construction workers from other countries in the EU currently often choose to work here, and are free to do so. Given the shortage of workers in the industry, this will become even more of a key issue should they choose to go elsewhere. If workers find that moving across to the UK is a complex legal process as result of new strict immigration laws, then they are less likely to choose to migrate. Skilled and unskilled workers from other EU countries are a vital asset to the construction workforce.
Potential slow down
A lack of labour will inflate the cost of construction, as workers will come at a higher premium. This could also mean a potential slowdown in project completion times, with workers spread more thinly. From a top scale perspective it also brings into question how many highly-skilled innovators will be looking to come across and work in the industry. We rely on scientists and developers, to promote growth in the industry with new ideas and innovations. Funding for innovation and investment in regeneration across the UK has been hugely bolstered by EU initiatives, like the Joint European Support for Sustainable Investment in City Areas. The UK has received hundred of millions in investment from EU initiatives, which will no longer be available.
The cost of construction could also be inflated as access to construction materials is caught up in new trade laws. As yet, there has been no finite decision on how import (and export) will be affected. It is almost certain that increased trading costs will push up the cost of materials and tools. Currently 62% of materials are imported from Europe, at a cost of around £9.5 billion. The UK also exports £3.8 billion worth of construction material to Europe. There has already been an increase in building cost materials thanks to the depreciation of the pound. If costs at the trade border increase, it could not only push up import prices, but also mean a reduced profit for construction material companies who sell abroad, if they are then undercut by traders inside the EU.
The wait for negotiations
The delay in negotiating individual trade deals with each country, should negotiations fail, will likely have a knock-on effect. Indeed, concern over the Brexit negotiations has already caused some delays, with companies slowing or delaying deals as they wait for the results of the Brexit deal.
The cost of Brexit to the construction industry is looking to be extensive. Trade negotiations and loss of free movement will ultimately drive up prices, and potentially drive down project completion rates.
How do you feel Brexit will affect your construction business? Or are you an individual worker, and hoping Brexit will offer you more career opportunities? Let us know.
What can you do to improve your employment prospects?
It’s very likely that construction industry managers, supervisors, and tradespeople will be in an increasingly competitive labour market moving forward, which is where formal recognition of your skills and experience is crucial. The Construction Design and Management Regulations (CDM) 2015 reinforced the legal requirement for duty holders within the construction industry to make sure everyone has the information, instruction, training and supervision they need to carry out their jobs in a way that ensures health and safety.
According to HSE publications, when a contractor employs an individual to work on a construction site, they should confirm whether the individual either has the skills, knowledge, training and experience to carry out the work they will be employed to do, or is in the process of doing this.
Within the same text it is advised that nationally recognised qualifications, such as NVQs, can provide contractors with assurance that a person has the knowledge, and the training, to carry out the task for which they have been employed.
Q2W are on hand to help you to achieve the NVQ most appropriate to your occupation, and help you boost your employment prospects moving forward.