Over 30 million Britons voted last month in a Brexit election that has resulted in what can only be described as a momentous turning point in our history.
With the results came the anticipated plunge in the financial markets; the pound has dropped to its lowest level against the US dollar in over 30 years. And to add insult to injury Prime Minster, David Cameron, has resigned; announcing plans to step down in as few as two months. Are we to glean hope from the fact that Boris Johnson looks to be the lead contender for taking command of the Vote Leave ship and negotiating the terms of Britain’s exit from the European Union?
Our financial and political ambiguity at home is all occurring against a backdrop of massive global uncertainty.
As a sector that is trying to grow and stabilise following the recession, you’d be forgiven for asking: where now for an already unstable construction industry?
What does Brexit mean for the construction industry?
One key area for concern is regarding employees. Many construction industry businesses have relied heavily on skilled EU labour for years; namely as a result of our declining domestic talent pool.
According to government statistics, 12% of the industry’s 2.1m workers come from abroad, mainly from the European Union. Freedom of movement has, therefore, been vital to the UK industry and following the vote to leave, will this flexibility still exist? Even before the referendum last month, it was reported that the industry had 224,000 vacancies to fill by 2019 in order to meet the existing pipeline of work. On paper, it adds up to the construction skills shortage getting worse before it gets better.
Soon after the ballots were counted Sterling fell dramatically against the US Dollar and the Euro. For an industry that imports resources, a weak pound serves to increase cost inputs as prices rise for raw materials; not to mention an increase in labour wages.
Perhaps a silver lining is imminent as there’s now speculation that interest rates will be cut from next month. Low interest rates will offer a necessary boost to the economy and I suspect this will prompt a rise in homebuying; good news at least for the residential sector.
Investment: Has the world lost its appetite?
Last month, Britain was referred to as ‘the gateway to the rest of Europe’. Will an exit from the single market mean a drop in investment? Or will it be an attractive opportunity to generate inward investment from the US and Asia, particularly in the commercial and residential construction sectors? And could this investment, in turn, again impact the demand for talent across the industry?
At the moment, we don’t know the timescales for leaving the EU – so in the meantime I believe that interest in investment may well increase from savvy global players. I also believe that we all need to have an informed, international perspective when making decisions that affect our local businesses.
One thing is for sure: This may currently be a time of economic uncertainty but we must remain optimistic, and continue to trade, to avoid talking ourselves into another recession.
Martin Mackenzie is director of executive search company Mackenzie England. Based in central Scotland, serving the whole of the UK and working internationally, Martin and business partner Pia pride themselves in being distinctly different; they explore all options to help their clients identify and attract exceptional talent. They will always be straightforward and honest, providing you with independent advice and guidance.Share this Post: