Is the Construction Industry facing a Brexit ‘cliff edge’?
As a reluctant remainer, but also an optimist I have watched the progress of Brexit negotiations with interest. I believe that Brexit will affect the construction industry in three main ways:
- Delaying investment decisions and negatively impacting on property market and wider business confidence. As an optimist however, I believe this has stopped our industry from overheating
- Creating potential supply chain issues relating to the European section of our supply chain from which we obtain individual component and whole building elements. However, I do feel that the industry will adapt to overcome this
- Loss of immigrant labour
I believe that the loss of immigrant labour will be the biggest challenge for our industry. The figures on the proportion of immigrant labour are unclear, varying depending on which data sets you look at and which parameters you take. Probably, between 8% and 13% of workers on UK constructions sites are from outside the UK. We are seeing that Brexit has already impacted on this labour source with some individuals having gone home and fewer coming in to replace those leaving.
The big question is whether the industry faces a cliff edge if the proposed transitional arrangements are not effective. In London, where over 50% of the construction workers are immigrants I believe there will be a cliff edge. Elsewhere in the UK where the level of immigrant workers varies between 3% and 8% my concern is that the best workers will be drawn into London by massively hiked salaries.
In early 2016 the Government commissioned Mark Farmer to review the UK construction industry; a number of similar reports have been produced previously but to little effect.
Mark Farmer published his report in October 2016, entitled “Modernise or Die”, it had a strong focus on:
- Embracing digital technology
- Utilisation of more off-site fabrication
- Improving quality
And, most importantly, training our people in the skills of tomorrow.
If Brexit creates a full-blown skills crises, it might be the catalyst for the UK Construction Industry to accept and implement the radical ideas outlined by Mark Farmer, much like Tier 1 car manufacturers transformed the car industry in the 1980s.
On a personal level, I believe that change is good for strong companies, Beard are working to remain strong and be in a position to win through, whatever Brexit throws our way!