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It’s been a year of uncertainty for many, including those within the construction industry. COVID-19 has caused many problems and delays, and most companies have felt the negative impacts of the pandemic. But that hasn’t been the only uncertainty for those in the industry. As it has for a while, Brexit has been a concern for those in construction for many reasons. In this blog post, we ask how will Brexit impact the UK construction industry?

Labour Shortage

The UK construction industry relies heavily on migrant workers for skilled and non-skilled roles. 28% of construction workers in London migrate from EU countries. Brexit could mean migrants losing their right to free movement, and in turn, their right to work in the UK. Limited immigration could mean the UK faces higher project costs. It’s possible that the number of housebuilders will decrease, and they won’t have the capacity to meet government deadlines. Limited immigration could mean the UK faces higher project costs.

Material Costs

As well as the free movement of workers being retracted, leaving the EU could result in the free movement of goods being retracted also. After Brexit, importers and exporters may face duties or limits on quantities. This could then lead to a shortage of materials, or an increase in costs. Back in 2010, the Department for Business Skills and Innovation conducted research. It revealed that roughly 64% of all building materials were imported to the UK from the EU.

Infrastructure

As a part of the EU, the UK benefited from €7.87 billion worth of investments as a result of having access to the European Investment Bank (EIB) and the European Investment Fund (EIF). Losing these revenue streams could affect the industry’s ability to deliver big infrastructure projects, like HS2.

Brexit

What’s next?

There are many questions that still need answering for many within the construction industry. In August, the Government announced a £1.3 billion investment fund for thousands of new houses and infrastructure projects. For such big projects, the construction industry will most definitely need migrant workers. EU citizens will have to apply to the EU Settlement Scheme to carry on living and working in the UK. The Government recently published a guide for the Construction Sector which you can view here.

This countdown to the end of the transition period on 31st December, the construction industry needs to prepare for whatever the outcome may be.