With just two months to go until the UK says goodbye to the European Union, there’s a strong likelihood it’s going to be an unceremonious no-deal Brexit. Despite months and years of negotiations agreement on trade deals have not be reached and this is going to have a direct impact on many industries.
For construction the effects will be felt in the labour force with stricter immigration laws being enforced. New trade tariffs will impact operating costs, and border checks and regulations will disrupt the supply chain process. Then there is also the issue of product standardisation. Will the UK adopt and maintain European standards or institute new standards? And how will this be implemented if this is the case?
While by all appearances the UK government has shown great commitment to negotiations, they have failed dismally to secure any form of agreement or share details of what the plan might be, in the event of a no-deal. The pressing questions of the construction industry have gone unanswered, which is making it impossible to plan and implement contingencies.
Major infrastructure and construction projects that are already underway and rely on supplies from the EU may be delayed if materials are held up at border posts. Many Tier one contractors have been stockpiling supplies as a precautionary measure to avoid this, as well as any new tariffs that imports may be subject to. But it is not a long term solution. For one, time is running out to stockpile and capital is not exactly flush in 2020. Clarity on new import regulations is needed, and soon.
While recent reports are that progress has been made in terms of expanding on the definition of tier 2 skilled workers in construction, there are still many roles that remain excluded. Currently migrant labour accounts for approximately 14% of people employed in construction. While the pandemic has resulted in a temporary decline in jobs available, if the sector is to spearhead economic recovery it will need access to foreign skills. Visa restrictions will make this difficult.
If the UK is to create new product standards and discard EU standards this will create a major issue for construction supplies. It will mean an additional cost of getting products recertified and a delay in getting them to market. One proposal is to continue to accept the EU standards and either adopt them into UK regulations or align the new UK regulations with them. While this may seem the logical approach, it’s not something industry should bank on.