Brexit: Planning for the unknown
While the news carries reports of continued failure of Governments on both sides to reach agreement terms for Brexit, the deadline continues to creep closer. In just over 7 months, with or without an agreement in place, Britain will no longer be part of the EU. And exactly what this will look like in business terms remains an unanswered question.
The impact of this is evident in particular within the construction industry. As a sector that that is reliant on trade deals to secure its supply chain of resources and skills, it has the industry in limbo. A recent CITB report found that almost two thirds of construction firms do not have strategic plans formulated to deal with Brexit, largely because there are too many unknowns.
Does the UK have enough skills without the EU?
The problem is that the UK construction industry employs approximately 2.25 million workers, of which 14.8% are migrant labourers and tradesmen. The majority of UK construction firms report that migrant workers are more productive and have a better work ethic so these are not skills that the industry can afford to lose. While many migrant workers interviewed indicated they intended to remain in the UK until retirement, unless this is supported by clear legislation this may not be possible.
Currently industry reports highlight that the skills shortage in the construction industry will be a major stumbling block unless stimulated by targeted training programs to upskill workers. Additionally, concerted efforts will need to be made to woo more senior skilled entrants into the industry to maintain the expertise needed.
Will new trade tariffs trip up the industry?
While the government would like to minimise the impacts of Brexit, if the negotiations are anything to go by, this is unlikely. Which means that companies taking a sit back and wait approach are likely to find themselves in hot water down the line.
While there is currently no detail on what post Brexit trade deals and tariffs will look like, this much is clear, costs are likely to increase and there will be impacts on the supply chain which will impact both bidding on new projects and the ability to deliver on existing contracts.
Contractors that have contingencies in place will be leaps ahead of their counterparts, mostly because they will have options available to them rather than being on the back foot