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Brexit and the future of UK construction

Ian Anfield, managing director for leading construction audit, contract and payroll provider Hudson Contract, comments on recent talk of a UK recession in light of the Brexit vote.Whether we’re entering a recession or not is a big talking point at the moment. Certainly, we at Hudson Contract have seen that the number of operatives averaged per client has dipped by 4.5% in the last three months, but it’s unclear if that means an output dip or the beginning of a long downturn. There are so many factors to be considered but I have an impression that any downturn may be relatively short-lived. I read a piece written by HSBC’s chief economist who commented that the government has done a number of credible things since the vote. These included ensuring new leadership headed by Theresa May, ruling out an early General Election, and ruling out an emergency budget. Taking time to speak with European leaders and not triggering Article 50 this year all seems to make economic common sense. It’s certainly not all doom and gloom. The latest reports from the Purchasing Managers’ Index reveals that construction output also recovered last month following a seven-year low in July. It appears that business confidence is stabilising and the feared short-term effects of the referendum have been short-lived to a certain extent. Overall I’m definitely one for seeing the glass being half-full for the construction industry. Private business can and will build if the government act in a decisive and positive way to minimise the uncertainty the Brexit vote created. We’ve all seen how Team GB performed recently — it’s time the whole country took on the ‘Believe’ mantra.

UK construction industry growth expected to slow down following Brexit vote

The UK construction industry is expected to experience major downside risks to growth following UK’s vote to leave the European Union, according to a new report.Timetric’s Construction Intelligence Center (CIC) new report, entitled ‘Brexit and the Impact on Construction in the UK’, concluded that the UK construction industry growth is expected to fall from 3.4% to 2.8% this year.The findings reveal the great deal of uncertainty as to what the full implications of Brexit are for the UK’s construction industry.Danny Richards, leading economist at CIC, recognizes that the industry growth started being affected during the EU referendum campaign.“Construction output growth had already started to slow ahead of the referendum, in fact output was down by 1.9% in the first quarter on a year-on-year basis, and the uncertainty that will prevail in the coming months following the referendum suggests that investment flowing into new projects will slowdown, and some works could be put on hold,” he said.Furthermore, the pace of growth in the UK construction industry in 2017 is expected to slow from 4% to 1.5% — reflecting a sharp downturn in investment as the government embarks on a two-year process of negotiating its exit from the single market.“The downwards revisions to our growth forecasts for construction output mean that the UK’s construction industry’s output in 2017 will be £4.8bn lower than what it would have been had the outcome of the referendum been in favour of the ‘remain’ campaign,” said Richards.