Building Britain’s Brexit – or Brexiting Britain’s Building Industry?

Building Britain’s Brexit – or Brexiting Britain’s Building Industry?

03rd April 2017

In the wake of Prime Minister Theresa May triggering Article 50 to begin the process of Brexit, construction industry experts are warning that the sector could be shelling out an extra half a billion pounds this year along on materials as a result of the EU Referendum held last June.  Figures published by the Office for National Statistics (ONS) are revealing that the net cost of construction materials imported from the European Union increased more than 15% in 2016!  What’s more, a survey carried out by the Federation of Master Builders (FMB) as recently as January, 2017 discovered that seven out of ten small building companies have seen an increase in costs as a result of the pound being weakened since the Brexit vote.  And, to add insult to injury, the FMB is anticipating that a further 10% increase in the price of construction materials from the EU in 2017 (and that was expected before the triggering of Article 50).

Of course, the rise in costs will ultimately be passed on to the client, not good news for either the contractors or the clients as it’s likely to have quite a significant impact on the construction industry as a whole.  The building project will still need to go ahead, with our without Brexit, if we want the UK economy to recover and grow but the rise in costs is likely to see the industry looking for other methods of cutting costs and increasing efficiency. 

Fortunately, at present 80% of construction products and materials used in UK construction activity are made right here in Britain.  Of the remaining 20%, 61% are imported from the European Union and the business model for these has been developed around barrier-free access with no need to hold stocks.  However, once the UK leaves the EU, all imported products will have to be stopped at the border and checked.  Drivers transporting these products will also need to be stopped and checked for visas and work permits which means that our current business model will need to change significantly.  As yet, we have no idea what to expect and what those changes will entail, so the future is still very much uncertain. 

The future of the construction industry here in the UK Is looking a little bleak at the moment with such bad news coming not long after the revelation by the warning from the Royal Institution of Chartered Surveyors (RICS) that the sector is likely to lose more than 175,000 EU workers when we leave the EU!  With a significant 8% of the industry’s workforce comprising non-UK EU nationals, their ability to work here in future is vital for many of Britain’s larger construction projects, as well as the smaller projects being planned.  Almost 100,000 of those EU national construction workers work in the capital itself and account for a massive 25% of the sector’s workforce in London.

Here at Safety Fabrications, we’re firmly committed to the construction industry and its future wellbeing and we’re a passionate advocate of doing more to attract youngsters into our industry in order to help address the skills shortage and promote the idea of a career in construction as a valuable choice.  We often report on developments in education in construction skills, so watch this space for news on this in the future.