Brexit and the Construction Industry in London.
Tuesday, April 11, 2017
Brexit and the construction sector.
The most used buzzword in the past year. It has been officially confirmed that the process of Britain exiting Europe has begun setting Britain on the path of exit for April 2019 with Theresa May leading the charge from the front.
Siteman Recruitment decided to look at the highly debated subject and see how it affects our business and other sectors of construction.
One of the major effects of the change will be that the free access to labour will become more difficult. For example, the more skilled workers will see Germany, France or Spain as a better choice than Britain as it is could become easier for them to move their depending on whether a hard or soft Brexit is forthcoming.
The construction industry accounts for around three million jobs in the UK. A total 10% of total employment, which has a significant number of these positions filled by non-UK nationals. With a greater number of these workers unavailable following the aftermath of Brexit you will be worryingly short of tradesmen in the construction area. The cost of construction has been on a steady increase the past six months rising an average rate of 8%, a rate that is sure to increase come April 2019.
With a number of major projects mooted for the next few years in the London area alone (HS2, Thames Tideway, Crossrail 2, Battersea Power Station, tube extensions) how will this affect the construction sector as a whole? Wages for tradesmen would get a welcome increase but worker shortages would lead to project delays and cancellations possibly.
Brexit could also have a major impact on future developments to transport infrastructure in the city as rapidly falling commercial and residential property prices could lead to the scrapping of Crossrail 2. Crossrail 2 is seen as essential to ease the housing crisis and improve the transport infrastructure that is already under serious strain.
These uncertainties are sure to create doubts in the minds of investors and government officials looked to invest funds leading to uncertainty and possible stagnation in the London construction market.