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Building a Better Future for the Construction Industry

Letter: Impact of a ‘No Deal’ Brexit on the Construction Industry   27th February 2019

The Rt Hon Theresa May MP 
First Lord of the Treasury, 
Minister for the Civil Service and Prime Minister
10 Downing Street  
London, SW1A 2PP 

Re:  Impact of a ‘No Deal’ Brexit on the Construction Industry 

Dear Prime Minister, 

Whether a leaver or remainer, we all rely on the construction industry to provide and maintain our built environment, and leaving the EU without considered arrangements in place for the UK to trade across Europe is already damaging and hampering our ability to do business. 

The immediate effect of leaving without a deal in place is not knowing the cost of the materials and goods that construction projects rely on, or if they will arrive on sites across the four nations to keep projects of all shapes and sizes on track. Delays in completing building and infrastructure projects impacts our lives in so many ways; it may be the new hospital in a community which will speed up lifesaving treatments, the homes desperately required, urgent maintenance to our heritage buildings or vital repairs to bridges and roads that will keep Britain moving.  The UK economy mirrors the construction economy and the lack of knowledge and information around the UK’s exit from the EU has already reduced investment and output which will not be recovered. 

Even now, the continuing inability of policy-makers to agree a way forward has left the vast majority of our members - multinationals and SMEs alike - struggling to overcome the market uncertainty impacting their businesses.  Data from the ONS and Markit/CIPS make clear the worsening erosion in recent construction activity; contracts for new major offices projects, for example, have fallen sharply since the EU Referendum due to concerns from investors over long-term economic prospects and returns. 

This comes whilst our members seek to properly prepare for an unknown future after March 29th.  As in other sectors, they are spending valuable time and resources on stockpiling; transportation and logistics alternatives; auditing and guaranteeing the resilience of their supply chains; and vetting contractual risks and obligations.  Leaving in an unplanned way on March 29th with a No Deal Brexit could lead to a fall of at least 4% this year and 2% next year in the £163 billion construction industry, and the greatest impacts felt on the house building and commercial sectors, which would both be expected to fall by at least 10% in 2019.   

With the impact of the previous financial crisis not forgotten in an industry that experienced countless business failures, plant closings and nearly half a million job losses, the resilience of our industry has its limits.  The construction sector is urging the Government and parliamentarians to do their duty and agree the arrangements for trading with the EU as a matter of urgency. 
 
Yours sincerely, 

Hannah Vickers, Chief Executive Officer, Association for Consultancy and Engineering (ACE)

Suzannah Nichol MBE, Chief Executive, Build UK 

Alasdair Reisner, Chief Executive, Civil Engineering Contractors Association (CECA)

Dr Diana Montgomery, Chief Executive, Construction Products Association

Brian Berry, Chief Executive, Federation of Master Builders
  

 

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