- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 18 Jan 2018
What does Brexit mean for construction?
 The result
The industry, throughout the campaign, had displayed mixed views on the prospect of Brexit, with particular concern about how it might affect the skills shortage, the import and export of materials, and regulations and standards.
Lord Bamford, the chairman of JCB, was an oft-cited voice for the Leave campaigners, as he was convinced that a Brexit would reduce the costs of bureaucracy so much that any additional costs of leaving the EU would be easily covered.
The construction industry relies heavily on foreign migrant labour for skilled and non-skilled roles. It is feared that outside of the EU, which guarantees the right to free movement, the skills shortage could worsen. If immigration is limited, particularly for skilled workers, the UK could witness higher project costs where labour demand outstrips supply.
This could have a knock-on effect on the capacity of housebuilders to meet the government's housing targets, with cost increases possible for the housing market and construction companies. This further decline in housebuilding could deepen the housing crisis especially in London.
Alternatively, if global investors start to take their money out of the UK property market, this could lead to a reduction in prices and free up investment properties that are currently sitting empty.
 Import and export of construction materials
As well as the free movement of people, membership allowed for the free movement of goods within the EU, eliminating duties and other restrictions. This benefited construction. A 2010 study by the Department for Business Skills and Innovation estimated that 64% of building materials were imported from the EU. The same report estimated that 63% of building materials were exported to the EU. With Brexit, importers and exporters may now face duties or limits on quantities, which could lead to a shortage of construction materials or an increase in costs.
It is unclear whether Brexit might enable the UK government to impose tariffs on cheap steel imports from China that have led to the decline of the UK's steel industry. Historically, UK governments have not been in favour of propping up industries in this way, and there is always the potential for retaliation from affected countries.
On the positive side, the UK may be able to negotiate and develop its own trade agreements with the EU and other large importing companies, such as China and the USA.
 Red tape
The general perception is that Brexit could result in a removal of the extensive red tape mandated by the EU. However, it is important to note that Brexit will not result in the breaking of all ties between the UK and EU. Whatever model is adopted, it is almost certain that a condition of a trade agreement with the EU would be compliance with existing trading standards.
As a member of the EU, the UK had access to the European Investment Bank (EIB) and the European Investment Fund (EIF). Together these institutions had invested €7.8 billion in major infrastructure projects, and lent €665.8 million to SMEs, respectively, in 2015. Losing both these revenue streams could have a significant impact on the delivery of big infrastructure projects such as High-Speed 2 (HS2) as well as start-ups across the UK.
Whist this may be replaced by some of the money saved from EU membership, it seems unlikely in the face of ongoing cuts to government spending that this would be invested in infrastructure.
What are your views? Click Add a comment at the bottom of the page and let us know.
 Related articles on Designing Buildings Wiki
- Buildings of the EU.
- European Union.
- EU Referendum - Environmental and climate change consequences for the built environment.
- Architects' Brexit statement.
- Brexit - the case for infrastructure.
- Brexit Topic Guide.
- BSRIA Brexit white paper.
- BSRIA calls for clarity following Brexit Article 50 High Court ruling.
- BSRIA response to Brexit speech.
- BSRIA response to Brexit white paper.
- HVAC and smart energy post-Brexit.
- Overcoming the challenges of Brexit.
- Post brexit, house building and construction remains a safe sustainable industry.
- Post-Brexit vision for construction.
- Triggering article 50 of the Treaty of Lisbon.
- UK construction industry.
- United Kingdom.
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