Brexit: ten things affecting the construction industry

27th June 2016

Constructiomn news Online informs us that the UK’s vote to leave the EU has wide-ranging ramifications for the construction industry: here are 10 things to keep an eye on.

1) Share price volatility: Contractor and housebuilder share prices are continuing to suffer. Balfour Beatty and Carillion shares have both fallen further today – Balfour shares are trading 13 per cent down on opening price this morning, while Carillion shares are trading almost 8 per cent down today – bigger falls than on Friday last week.

2) Sectors to be hardest: With wide-ranging consequences facing the construction industry following the vote to leave, Construction News assesses the sectors that could be most affected.

3) Construction costs: Fears over short-term cost increases hit the market, with contractors locked into lump-sum work expected to feel the most pressure.

4) Spotlight on major schemes: Projects across the commercial and infrastructure sectors are under scrutiny, with many people questioning whether they will go ahead as planned.

5) Procurement opportunity: A vote to leave the EU could present an opportunity for the UK to streamline its public procurement processes.

6) Network Rail ‘Digital Railway’ under threat: Speaking ahead of the vote, Network Rail’s chief executive Mark Carne said the vote raised concerns about his plans to fully digitise the rail network’s signalling system.

7) Calls on government for certainty: Industry bodies including Build UK, the FMB and CECA have called on the government to give assurances about its project pipeline.

8) Skills crisis looms: A high proportion of the construction industry is reliant on EU labour. Experts assess how this could affect the workforce and firms’ ability to deliver projects on time.

9) Investment risks: “Will people be prepared to invest when there is such uncertainty around the economy?” asks Severfield chief executive Ian Lawson. 

10) Political fallout: Prime minister David Cameron has said he will step down as leader, prompting a leadership race; the Labour Party is in turmoil, with a number of shadow cabinet ministers quitting over the weekend; and a second Scottish independence referendum is “highly likely”.

Source: Construction News Online