Construction and the ‘B’ word< Back to Blog
Unless you’ve managed to isolate yourself from any news for the last three years, you’ll be well aware that, right now, there’s only one ‘B’ word – Brexit. You may be less aware, however, that among many contractors, suppliers and trade associations in the construction sector, this particular ‘B’ word is being considered in a similar light as the last financial crisis!
When the current Prime Minister took up his position in Downing Street, the UK Construction Products Association (CPA) wrote an open letter to him laying out their concerns about the implications of Brexit (and in particular a no deal Brexit) on the construction sector.
“While we recognise and respect the referendum result, we believe the UK must leave the EU in a considered, managed way in order to avoid the likelihood of massive short-term disorder and potentially long-lasting damage.”
The letter goes on to talk about the struggles that its trade association members are facing around market uncertainty; how recent construction activity like major office contracts has fallen since the referendum; and the time and resources companies are having to put into actions like stockpiling, carrying out supply chain audits and seeking transportation alternatives – all in preparation for what is still an unknown future after 31st October.
Describing the impact in purely financial terms, the letter states:
“Our forecasts show that with a deal in place and a smooth Brexit, construction output would rise by over £1.2 billion by the end of 2020. Leaving in an unplanned way with a No Deal Brexit however could lead to a fall of £10.5 billion over the same period, with the greatest impacts felt on the house building and commercial sectors.”
With all of this in mind, we wondered what advice the government is giving to the construction sector in the run up to Brexit.
On its website, the government list various things that construction companies should be considering, including what to do if you’re involved in any kind of importing/exporting trade; what standards and regulations might need further consideration (e.g. you could have new obligations under UK REACH if you use chemicals in your work); and what you need to do in terms of ensuring employees who are EU/EEA or Swiss citizens have the right to work. Read the full information here.
What this advice doesn’t help with, however, is what the CPA describe as one of the immediate effects of leaving the EU without a deal – the fact that we will no longer have any certainty about the cost of the materials and goods our construction projects rely on or whether they will continue to arrive on our sites across the UK on time so that projects can stay on track.
It seems highly likely that something we may all have to face, therefore, are delays.
“Delays in completing building and infrastructure projects impacts our lives in so many ways; it may be the new hospital in a community which will speed up lifesaving treatments, the homes desperately required, urgent maintenance to our heritage buildings or vital repairs to bridges and roads that will keep Britain moving.”
Sheriff Construction has been in the construction business for almost fifteen years. We survived (but have definitely not forgotten) the impacts that the last financial crisis had on our business and on others with whom we worked and very much hope the next few months and years ahead will not be comparable to that time. We realise, however, that we may be about to enter a period where we’ll need to demonstrate resilience and resourcefulness and luckily these are both qualities that we count as strengths within our company.
Wie wish all our colleagues across the sector good luck over the coming months.
Read the full version of the CPA letter to Prime Minister, Boris Johnson here.
Main image source: Freepik