With the UK set to leave the European Union on 29 March 2019, Brexit is expected to impact the construction industry. Although the true extent of this impact remains to be seen, we take a look at some of the industry’s concerns.
Importing and exporting construction materials
The free movement of goods and trade laws in a post-Brexit Britain has been a hot topic; as has the potential impact on the pound. The UK construction industry has long relied on imported materials; approximately two-thirds come from the EU.
While the impact on the pound remains to be seen, a weaker currency could see the cost of imported materials rise. Changes to import regulations could also see a rise in costs due to revised tax and custom fees. These changes may encourage businesses to start purchasing materials from UK based businesses, which would have a positive impact on the wider market.
Access to a skilled workforce
For many years, the construction industry has relied on migrant workers for a proportion of its skilled and non-skilled manual labour roles. In the UK market, 7% of construction workers are from EU member states, and in London alone migrant workers account for 28% of the construction workforce.
The introduction of a new visa system and process could put skilled migrant workers off applying to come to the UK for work. This coupled with a shortage of British workers, could cause problems for the industry. A reduced workforce would have a negative impact on the Government’s plans to build new homes, by causing delays to the delivery of these projects.
Changes to regulations
The construction industry is highly regulated, and many of these regulations come from EU directives, for example a number of health and safety regulations and the Construction (Design and Management) Regulations (CDM).
It is currently unclear what impact Brexit will have on such regulations; we could see stricter regulations or a more relaxed approach, either could have a positive or negative impact on the industry.
What happens next?
Although the UK will leave the European Union at the end of March, the Government expects a transition period of two to three years, so it will be some time before we truly understand the impact of Brexit.
What is clear however, is that the story doesn’t end on 29 March, and industry professionals will continue to keep a close eye on what the impact of Brexit means to them and their business as it develops.