Brexit Blamed For Cancelled Construction Projects

An overwhelming majority of the construction industry attributes political uncertainty and Brexit fears for the delay and cancellation of UK development projects.

Overall, the construction sector is fearful that constant Brexit delays will lead to greater turmoil in the sector with cancelled construction, reducing foreign/skilled labour, increased material costs and reduced investment all realistic consequences of a UK withdrawal from the EU.

78% blame prolonged Brexit negotiations for placing UK construction projects on hold with many anxious that further delays will lead to greater disruption, according to research conducted by City Hire.

Regardless of whether the UK leaves the EU with a deal in place, 78% of respondents believe a changed partnership with the EU will increase material costs whilst almost half (44%) believe investment will dry up following the UK’s exit.

In terms of labour and wages, over half (52%) believe wages will remain the same, 52% feel as though unskilled labourers will decrease post-Brexit and 51% feel as though skilled labour will also decline following a UK exit from Europe.

Given that 9% of the UK construction workforce is made up of EU workers, many are claiming the Government need to relax non-EU migration systems to ensure smaller construction companies are able to recruit the staff they need in the future.

Lionel Burgess, City Hire’s Sales Director, said:

“With the uncertainty around the supply of materials sourced from outside the UK, contractors are waiting to see how their costs change before committing to a project at the risk of losing money.”

Brian Berry, Chief Executive of the Federation of Master Builders, commented on labour implications by insisting a simple Brexit visa system could help the construction sector:

“The CITB report is absolutely right to highlight the barriers facing construction employers needing to employ non-UK workers.

“The Government needs to look again at its post-Brexit immigration system to make it easier and simpler for small building companies needing to recruit non-UK labour. There is currently a serious skills crisis in the building industry which explains why 9% of the construction workforce is made up of EU workers.

“Given it takes many years to train a high-quality tradesperson there will, in the short term at least, continue be an urgent need to recruit non-UK labour. Without this labour the industry will not be able to deliver the homes and key infrastructure projects that are needed to underpin the UK’s national productivity and growth.

“The current non-EU migration system is exceptionally difficult for small employers to engage with taking as long as eight months in some instances to secure specialist tradespeople to come to the UK to work on sites.

“Most small businesses simply don’t have the time and resources to take that on. It would be very damaging just to extend this system to EU workers without seriously reforming it. Extending ‘low skilled’ visas from 12 months to 24 months; allowing non-UK born workers the opportunity to transition to a ‘high skilled’ visa; and the creation of an ‘umbrella sponsorship’ scheme would help ease concerns about how construction companies are going to fill the skills gaps.”

How should the Government address the potential skills shortages and rising import costs for construction companies following a definitive Brexit outcome?

Today's Conveyancer