Two-thirds of construction industry professionals are concerned about the outlook for the industry post-Brexit, according to a new reader survey for PBC Today
With the UK set to leave the European Union on 31 October, 65.2% of respondents asked to give their level of confidence for the construction sector said they are either concerned or very concerned.
Just under one in five (17.3%) were confident about the outlook for construction, with 8.4% declaring themselves very confident and 8.8% neutral.
Key issues included the lack of detail from the government about post-Brexit arrangements for EU workers already here, continuing access to labour and materials from the continent and the falling strength of the pound leading to higher costs.
There are also concerns that Brexit uncertainty and any economic downturn if the UK leaves without a withdrawal agreement will delay investment decisions by clients.
Some said they are already seeing shortages of technical staff in sectors such as architecture and clients holding back on spending.
“The construction industry is precarious at the best of times and heavily reliant on overseas labour and skillsets,” said one architect.
“Even a small period of upheaval will inevitably cause disruption and job uncertainty, with investors less likely to green light new projects in the short term.”
Nevertheless, some felt that once the UK leaves, the industry will have a clear direction and more global outlook.
“When we leave the EU as per the referendum result at the end of October, we will have a direction and certainty as to what we need to do as a country,” said one company working in the engineering sector.
“We will still be a vibrant economy that attracts investors more from across the globe, rather than just the EU. We will be free to seek new trading relations with the rest of the world, which in the long run will prove positive for our economy.”
The Construction Industry Brexit Survey comes after the Red Flag Alert from Begbies Traynor showed that the number of construction companies in significant financial distress rose by 10% year-on-year in Q1 2019 to 13,018.
Mark Halstead, partner at Red Flag Alert, said: “Capital-intensive sectors – such as construction and property – are suffering as both business and consumers are taking a cautious approach to spending.
“If construction struggles this can have a significant impact on the economy – 17% of all UK businesses are in the construction sector, it employs almost 2.5m people and contributes 6% of the UK economic output.”