The potential impact of Brexit on the Construction industry
With its potential to affect everything from labour supply to funding, Brexit is creating uncertainty across the construction industry.
But while this is unsettling, construction firms must work closely with their brokers and insurers to ensure risk is well managed and appropriate cover is maintained. Whatever shape Brexit takes, there are likely to be some significant ramifications for the construction sector. Construction firms do employ migrant workers, so restrictions on the movement of people will exacerbate the current labour shortage.
Design consultancy Arcadis predicts that while a soft Brexit could mean 135,000 fewer EU workers will join the sector, this figure could rise to 215,000 in the event of a hard Brexit.1 With its potential to affect everything from labour supply to funding; Brexit is creating uncertainty across the construction industry. The supply and cost of building materials will also be impacted if restrictions are imposed on the movement of goods. With almost two thirds of building materials imported from the EU2 , the introduction of tarifs coupled with a potential fall in sterling could see costs escalate, leading to an inflation in claims costs. Add to this the potential for delays due to custom checks, and firms with just-in-time supply chain logistics will feel the pinch.
Funding is also likely to be affected, with infrastructure projects in particular feeling the effects of the loss of money from the European Investment Bank. More broadly, the potential for an economic downturn in the UK could also dull investors’ appetite for construction projects. This could see funding being removed from contracts, both before they start and during construction.
To read the full report Brexit and Construction Uncertainty report CLICK HERE
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