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Why Construction Firms are Worried by a Hard Brexit

After the UK voted in favour of leaving the EU in its historic referendum back in June 2016, many industries have been plunged into uncertainty. The construction sector is one of these, with the possibility of a hard Brexit worrying the bosses at many UK firms. Until Article 50 is triggered and negotiations get underway for the UK to begin actually exiting the EU, a lot of uncertainty will remain. Many construction companies are already looking at solutions in advance, such as construction financing from Touch Financial to protect against these future concerns.

Potential Loss of Workers

According to a report by consultancy firm Arcadis, 214,00 fewer people from the EU would enter the infrastructure and house building sectors from now until 2020, assuming Article 50 is triggered by March 2017. This is a huge number and would have a significant impact on recruitment for many firms in the industry.

Those figures are based on a hard Brexit, where a points-based system is put in place for EU workers as well as non-EU workers, which would see more leaving than arriving. The same report finds that even with a ‘soft Brexit’ around 135,000 workers would be expected to be lost from the sector.

Increasing Skills Gap

Such a dent to workers in construction is likely to lead to a skills gap, even though the industry is reliant on a lot of semi and unskilled workers. This makes it more problematic for the construction sector than others though, as the influx of unskilled workers is necessary.

With a stricter points based system that may come with a hard Brexit, fewer unskilled workers will enter the UK to take up such positions. At first it will create something of a skills gap, but if it increases then this could widen and cause a real issue for UK construction.

Rising House Prices

The rising skills gulf from a hard Brexit will also drive up house prices, as fewer will be built at a time when they are most needed. According to research, 9% of construction sector workers are from the EU, so if many of them are lost or leave the UK it could have a real problem in meeting future construction targets.

On the other hand, in some areas house prices could decrease if immigration does fall. The results of future negotiations between the UK and EU will have a big impact on the future of British construction should it be a hard or soft Brexit.

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