Can the UK construction industry survive after Brexit?

January 9, 2022

The construction industry at present relies on a steady flow of migrant workers from the European labour market, so any constraints will likely have an impact. Any skills shortage will possibly lead to higher labour and construction costs and lead to project delays. This is likely to be felt mainly on large-scale projects such as HS2 and Crossrail 2 where a significant work force will be required. The construction industry hasn’t appeared from the Brexit vote unhurt and it’s certain that there will be problems to solve for companies in the sector going forward.
The US and China are the major sources of foreign direct investment in financial services in Britain. The European Investment Bank (EIB) has invested £16 billion in UK projects in the last three years, which includes the expansion of the M8 motorway between Edinburgh and Glasgow and a loan of £700 million to the Thames Tideway Tunnel. The United Kingdom is presently the joint largest stakeholder in EIB but now, post-Brexit, is likely to have to surrender its impartiality. Shareholders must be member states, so future EIB lending decisions will no longer involve the UK. More importantly, EIB lending on UK projects will certainly decrease. EIB is currently operating as usual however this is likely to change in the near future. If the UK remains in the European Economic Area, still following the same procurement rules, they will now only get 1/43rd of the EIB’s financing due to the UK for not being a state member of the EU anymore.
The UK construction industry’s dependence on EU labour means that the tougher it is for workforce to come and work here, the greater load there will be on site rates. The main problems to be resolved in the negotiations are:
The security for current resident EU workers
The security for current travelling EU workers
The government administrative barriers for folks
The government administrative barriers for EU businesses using their own work force.
Some other factors which will affect the work flow are effect of exchange rate on the attractiveness of working in the UK for those who send money to their home countries and the availability of work elsewhere in the EU.

Migrant labour is not new, especially within the construction industry. Construction work could be described as a handy feast, and most of the great construction projects worldwide have historically been built by migrant labour. Although knowing the benefits of immigration, governments should turn to protect the rights of workers both at home and from away. Appropriate training structures and opportunities should be provided as it will help native workers find jobs, though fair competition can be ensured by tackling unfair employers rather than by penalizing or hindering those traveling in search of work. Construction workers must go where the work is, and the industry relies on them because of it. As a result, immigration has kept the part vibrant and gainful. Hopefully it will last for generations to come.

Although there is a deadline of March 2019 for completion of exit agreement of BREXIT, the current pace of dialogs would suggest that there will be a transition agreement, which will delay any direct impression but may affect business confidence potentially, the flow of EU labour and Sterling’s value. Overall, the companies that survive the Brexit process will do so as they survived the credit crunch. It will require a solid belief in the business and its staff, great problem-solving skills and the development of a reputation for delivering to advance under the circumstances.

Share on social

See more Ontime Contracts news

See our latest company news and updates below