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What Impact Will Brexit Have On The Construction Industry?
After months of debate, the United Kingdom last week voted to leave the European Union. For many the outcome of the vote has left a cloud of uncertainty hanging over the country – most notably around the ongoing relationship the UK plans to have with the European Union and what arrangements will be in place regarding the movement of people and services.
With output from the construction industry having already stagnated during May, many within the industry are concerned that leaving the European Union could result in international investors pausing future investment in UK projects.
In an interview with the Independent, an unnamed source said:
"Construction projects that are underway are going to continue. It's six to seven months down the line where a lot of projects are going on ice. What you'll find is the construction industry potentially running into a brick wall. There's a danger of a huge drop off. And if this is the situation for two years [the assumed time for the UK-EU divorce terms to be negotiated] that's an awful long time for construction companies."
Great News for UK Construction
Meanwhile the new Chairman of the Construction Industry Council took a different view and described it as great news for most UK construction companies. John Nolan explained why he feels an end to tendering projects through the Official Journal of the European Union (OJEU) will help to bring down costs and provide more opportunities to small and medium sized firms:
"Last week's referendum result heralds a seismic change in the way our country does business with Europe and the rest of the world and will particularly affect the trading environment of our built environmental professionals. It is my intention to see that their voice is heeded in the negotiations with the EU and subsequent negotiations with our other trading partners throughout the world. We have the opportunity to consign UK OJEU to the dustbin of history with its ridiculously inflated bid costs that squeeze out the SMEs and its massive deleterious effect on the cost and quality of public sector projects"
The uncertainty has left many within the industry waiting to discover what agreements the new Prime Minister will secure with the EU once negotiations begin towards the end of the year, but all probably agree that direction is needed sooner rather than later.
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