Everyone with an interest in the building trade, from home-owners planning an extension to project managers and developers with millions of pounds at stake wants to know how Brexit will affect their own construction projects. We don’t have a magic window into the future, but with years of industry experience, we can say that Brexit is likely to make your construction projects more expensive, so if you’re considering whether to build this year, next year or in 2020, don’t delay. To show you why we believe this, here are some of the key ways Brexit will affect the construction industry.
Reduced immigration from Europe
This was one of the main points of leaving the EU for many people so it’s hard to believe that any Brexit agreement won’t limit migration between the UK and the EU. At the very least we can expect all EU immigrants to need a visa, which will delay arrivals and put off people from coming. Experts predict that this could reduce the UK construction workforce by about 8% as up to 175,000 EU workers are lost. This is expected to lead to higher costs as firms raise wages to attract the remaining workers and delays where workers can’t be found.
…and an increasing skills shortage
EU and other foreign nationals on construction sites aren’t just unskilled labourers. In many cases they are highly skilled. Being able to hunt for workers across the whole of Europe has been a real boon for the construction industry as it’s made it possible to find skilled workers on both short or long term contracts. This has been a particular benefit for projects which require specialists with rare skills or who are highly-qualified – a power plant design expert from Paris or a dry stone wall repairer from Riga might not want to move to the UK permanently, but might be willing to come on a 3 month contract and see a job through which is ideal for many British projects. Even if Brits spot a gap in the market and start training to fill these roles, it will take years or decades for British workers to fill the gaps so costs will be higher in the interim.
More red tape
Although many were hoping that leaving the EU would mean less Brussels-based red tape, we’ll still have to deal with the EU as they are likely to remain our largest trading partner for both imports and exports. Instead of working under one system, post-Brexit we may find that British and EU standards diverge, meaning increasing effort and red tape to ensure that, for example, German parts meet British safety standards and vice versa. This is likely to be a problem straight away, as everyone struggles to learn a new system, and then longer term as the systems diverge.
Higher materials costs
Even if the pound recovers, leaving the EU is likely to increase the costs of doing business with EU member states, which includes importing raw materials (such as marble, wood, and tiles), tools and supplies (such as drills, screws, pipes and wires) and finished products (such as windows, doors and baths). Of course, we may be able to draw on imports from other countries, but a key advantage of trading with the EU is that it’s close, which means that delays between order and arrival are lower, and has the same high safety and quality standards we do in the UK.