Brexit fears delay big building projects

  • 17 May 2016

howardchapmanHoward Chapman, Buildingtalk Editor:

Buildingtalk will be at the Brexit Briefing being held during at Clerkenwell Design Week to assess what the impact Brexit would have on the UK construction industry.

Brexit Briefing

Fullscreen capture 17052016 051816UK Construction Week and World Architecture News will bring industry leaders together to examine the impact a Brexit would have on the industry.

Buildingtalk, a media partner with UK Construction Week, will be reporting from this key Brexit Briefing to be held on Thursday 26th May at Grimshaw Architects offices during Clerkenwell Design Week (24 -26 May).

Brexit fears affect construction output and growth

Fullscreen capture 16052016 101718Construction data from the Office for National Statistics has added to evidence that Brexit uncertainty is putting business activity on hold. A sharp fall in construction output in March means that the sector contracted by 1.1% in the first quarter overall.

Last month, when the ONS published its first estimate of Q1 growth (0.4%), it pencilled in a smaller drop in construction output of 0.9%. That was before it had the data for March.

In the first quarter, all new building work fell by 0.6%, while repair and maintenance dropped 1.9%.

House building was the bright spot, growing by 4.8% in the first quarter. Infrastructure fell 5.6%.

IMF and Bank of England warning on Brexit

The stark warning, from Christine Lagarde, IMF managing director, was coupled with analysis that found a vote to remain in the EU would spur a rebound in growth in the second half of the year, bringing to an end more than a year of stagnant output and falling business confidence.

Mark Carney, Bank of England governor, also warned that Britain could fall into recession following a Brexit vote.

Phillip Inman, economics correspondent at The Guardian reported on the International Monetary Fund warning of a stock market crash and steep fall in house prices that could follow a vote to leave the EU. A panic among investors about the future path of the UK economy would trigger shockwaves throughout the economy.

Samuel Tombs, Pantheon Macroeconomics chief UK economist (quoted in The Mail) said ‘The latest construction figures provide yet more evidence that uncertainty about the outcome of the EU referendum is slowing the economic recovery.’

Chancellor George Osborne warned that global market reaction to a Leave vote in the June 23 referendum is likely to be ‘negative and could be severe’.

Howard Archer, IHS Global Insight economist, said construction output had ‘nosedived in March’ and had been affected by increased caution among clients amid heightened UK economic uncertainties, that are being magnified as June’s EU referendum looms. However, if the referendum results in a vote to stay in the EU, the construction sector, the reduced uncertainty would cause delayed projects to kick in.

Have your say on Brexit

We will be reporting the outcome of next week’s Brexit Briefing. Do add your comments below, especially any insights you have into the potential Brexit affect on your sector of the construction industry.

2 comments on “Brexit fears delay big building projects

  • Brexit comment from REC (Recruitment and Employment Confederation) in Staffing Industry Analysts.

    Construction recruiters predict that a vote to leave the EU would exacerbate the shortage of candidates with 59% saying that a Brexit would make it more difficult to find suitable workers to fill vacancies, while only 5% believe the situation would be improved.

    REC Chief Executive Kevin Green: “The UK is close to full employment and building firms are already struggling to find the people needed for major infrastructure projects. If Britain leaves the EU there’s no doubt that recruitment for some construction roles will become even more of a challenge. Whatever the outcome of the EU referendum we need to address deep-seated skills shortages. That means more apprenticeships, greater investment in skills development by employers, better careers guidance in schools, and more work experience opportunities so that young people are shown the potential benefits of a career in construction.”

Leave a Reply

Latest news

DensDeck
Mitsubshi Electric

Family Day Workshop by Mitsubishi Electric

If you are an architecture or environmental enthusiast, bring your children along to a family day of fun and educational activities at the Building Centre on Saturday 22nd June – Mitsubishi Electric will deliver its award-winning programme, The Learning Curve (with a few twists), designed to teach children about energy use and energy efficiency.

Posted in Articles, Building Industry Events, Building Industry News, Building Products & Structures, Building Services, Facility Management & Building Services, Heating Systems, Controls and Management, Heating, Ventilation and Air Conditioning - HVAC, Pipes & Fittings, Plumbing, Retrofit & Renovation, Sustainability & Energy Efficiency

Keller

Keller Kitchens excels in Kiwa assessment

Keller Kitchens has been reassessed by Kiwa, a European institute that is involved in the certification of processes, products, employees and organisations. Once again, the company passed with flying colours!

Posted in Articles, Building Associations & Institutes, Building Industry News, Building Products & Structures, Building Regulations & Accreditations, Building Services, Interior Design & Construction, Interiors, Kitchens, Research & Materials Testing, Restoration & Refurbishment, Retrofit & Renovation, Sustainability & Energy Efficiency

National Ventilation

National Ventilation’s Operations Director Completes D-Day 44 Challenge

Alan Parkinson, Operations Director at National Ventilation, has completed the D-Day 44 Challenge in aid of Combat Stress, the UK’s leading charity for veterans’ mental health.

Posted in Air Conditioning, Articles, Building Industry Events, Building Industry News, Building Products & Structures, Building Services, Charity work, Heating, Ventilation and Air Conditioning - HVAC