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What happens to European Standards in a post-Brexit Britain?

Europe has led the world in improving building standards with the UK having played a key role in their development. But after the momentous day that was June 23rd and the UK economy appearing now to have weathered that initial vote-to-leave shock, where does that leave the construction industry in terms of EU regulations?

The British Standards Institution (BSI) is one of 33 voting members of CEN (European Committee for Standardisation). However CEN rules state that you can only join CEN if you are a member of the EU or about to become a member. In the case of non-EU countries including Norway and Switzerland, their membership in the European Free Trade Association (EFTA) qualifies them as well. When the UK finally leaves the EU it will therefore be essential for the UK to rejoin EFTA otherwise the BSI will have to argue for a change in statutes of CEN so that they can continue their membership of this organisation. And in that scenario, there may well be a lot of political pressure to keep us out.

But then what does that mean for the UK and what is the scenario of the UK walking away from the EU standard table? Any product intended for sale in the EU must meet the relevant EU standard. Non-compliance will clearly restrict markets. One of the key things about EU standards is that they do ensure a level playing field and are considerably better than each country having a different standard and system of compliance.

To add to this, the Construction Products Regulation (CPR) has, since 2014, mandated that all products produced for sale in the EU provide a declaration of performance and visible CE mark. In their BREXIT negotiation, the UK Government would be able to ignore the CPR and revert to BS standards instead of BS EN standards. This scenario seems unlikely as this would complicate matters with the possibility of two-tier standards. And that might a have a knock-on effect for manufacturers with variable production runs and increased stock levels.

And how does an EU standard compare to BS? Some BS testing is outdated and not as relevant to real-life scenarios. We tend to cling to some out of ‘habit’ when more representative standards exist. One such example is the adherence/preference of the UK to BS476 testing regimes for curtain wall perimeter fire barriers, when a specific EN test standard EN1364 offers a far more representative test option. The BS 476 standard tests curtain wall perimeter fire barriers in a static assembly, whereas the EN1364 tests simulate the dynamic movement of the curtain wall façade, which we would contend is a far more sensible and robust option. Siderise is amongst a very few suppliers who have opted for the EN1364 test, as we see it as far more representative of “real life”.

At the moment the UK has a vote and we can influence EU standards, and on occasion we could in theory ‘block’ standards that we did not like or at least modify them. One scenario is that we can go to meetings post-BREXIT, provide technical input, but in the end not have a vote – unless of course we negotiate some arrangement whereby we are allowed to vote. But that would appear to be fraught with difficulties. Whatever the outcome, we must not fall out of step with Europe. The costs to industry of totally abandoning EU standards are so vast as to be too horrible to contemplate.

By Chris Hall, Commercial Development Office, Siderise 
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Good and bad news for construction last month

After more than two months since the Brexit vote, it’s good news for the residential construction sector, as the value of contracts awarded reached £1.7 billion in August, an increase of 13% compared to the same time last year, based on a three month rolling average.

According to the August edition of the Economic & Construction Market Review from industry analysts Barbour ABI, it was the residential and infrastructure sector that kept the industry on a steady pace last month, delivering £3 billion of the £5.5 billion total construction contracts awarded.

It should also be noted that residential construction across the first two post-Brexit months (July & August) are significantly higher figures than when compared to the same months in 2015.

However even with the strong results from the residential sector, it was not enough to mark an improvement for overall construction new orders as they were down to £5.5 billion in August, a month-on-month drop of £300 million, although this is traditionally a slower summer month.

The commercial & retail sector particularly struggled in August, experiencing a decrease of 43% compared to August 2015, which continues a poor run of performance over the long term for the sector.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “The construction sector is yet to experience the full post-Brexit effects that were forecasted to occur after the result was announced. The mixed results from the residential sector has still been robust enough to keep the industry in a position to potentially grow in the near and long-term future.

“Developers are also keen to keep progressing with major projects, such as the £750 million Galloper offshore wind farm and the £150 million Greenwich Peninsula residential development commissioned this month alone, which in turn is helping to build confidence and provide a well needed boost across the industry.”

Read the full report here.
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Without skilled migrant workers the UK faces construction crisis, warns experts

Secure post-Brexit access to a skilled workforce or risk a construction crisis, professional bodies warn Government Brexit Minister, David Davis has been warned that the UK’s construction skills crisis could severely worsen, if the Government does not take steps to ensure access to a skilled workforce during its post-referendum negotiations.

The warning comes from a coalition of professional bodies representing the construction and built environment sectors. The Royal Institution of Chartered Surveyors (RICS), the Royal Institute of British Architects (RIBA), the Chartered Institute of Building (CIOB) and the Royal Town Planning Institute (RTPI) have written to the Secretary of State for Exiting the European Union, outlining their concerns around skills, as well as five other priorities that the UK Government should focus on in light of the UK’s Brexit vote.

The six priorities are:

Access to skills

The greatest strength of our sector is the skill of our workforce. The free movement of labour within the EU has been vital to the growth and flexibility)of the construction sector. Access to a skilled workforce of the highest quality and a focus on developing the next generation of home-grown talent are critical to ensure we can build the homes businesses and infrastructure we need to compete globally. We therefore urge the Government to explore options and approaches to ensure that this access is not impeded to the detriment of the built environment.

Common standards

We believe that the UK has much to gain from pursuing an approach that makes it easier to do business with trading partners new and old. Access to markets in the EU and around the world has transformed the UK construction sector. The mutual recognition of qualifications and the development of common technical standards have reduced the barriers our members face working abroad. Reducing tariffs and harmonising standards have helped UK firms of all sizes expand to Europe and beyond. These common approaches have also meant that UK businesses can support best-practice in environmental and product standards, supporting efforts on global issues such as climate change. It is imperative that governments in the UK protect and promote the UK’s role as a leader in environmental and consumer protection standards.

Research excellence

Our members have benefitted from the collaborative research that the EU has enabled and promoted. Our future success depends on maintaining these relationships, while forging new ties with research organisations around the world. In addition the continued success of our world class university courses training our young people in the built environment is essential to the underpinning of research and the continued supply of labour for construction and allied activities.

Infrastructure investment

The UK’s global competitiveness will be hampered unless we do more to tackle the major infrastructure challenges we face. With a housing crisis, and growing concerns around energy, telecoms, road, rail and airport capacity, the Governments in the UK must seek and entice prospective investors to consider infrastructure of all kinds. Providing confidence to the construction industry through infrastructure funding and development will provide stability during a period of uncertainty and ensure that the UK is well-placed to take advantage of growth opportunities in the future.

Devolution commitment

The referendum has brought divide between the different parts of the UK into sharp focus. Our organisations welcome the recent commitment to continuing the Northern Powerhouse and we believe that further devolution from Whitehall should be a key priority for the UK government as powers move from the European Commission. Devolution will enable a rebalancing of the economy so that all parts of the UK can benefit from any new opportunities arising from the UK’s new relationship with the European Union, and is an effective way of ensuring infrastructure spending is efficient, timely, coordinated and accountable.

Community development

Through the extensive skills and experience of our members we are best-placed to advise on how the built environment can unlock new opportunities and combat existing challenges, as well as provide places for people to live, work and play. Leaving the EU could present a great opportunity for the UK, but it should not be associated with a drive to the bottom in the environmental and building standards which future generations will live with.

RICS President, Amanda Clack FRICS, said “Recent RICS figures have shown that we are in the grip of our worst construction skills crisis in almost 20 years. There is a real concern within our industry that if access to a skilled workforce is further restricted, Britain could stop building. My colleagues and I would urge Government to keep this at the front of their minds when they come to negotiate our withdrawal from the EU.

“We know that infrastructure and construction investment is key to Britain’s economic growth. The uncertainty that immediately followed the referendum outcome led to decline in economic growth, increased market volatility and a reduction in UK infrastructure investment.

“While the initial post-Brexit slump appears to have stabilised, it is important that the Government focuses on maintaining infrastructure and construction investment leading up to and after Brexit, ensuring the right conditions are in place to attract infrastructure investors in all sectors across the UK.

“As we approach an unprecedented period of uncertainty, it is fundamental the government prioritises infrastructure and it remains at the forefront of maintaining a strong economy.”

RIBA President Jane Duncan commented “UK architecture, surveying, town planning and construction are flexible and innovative professions. I’m confident our members can help deliver strong economic growth in the UK, providing the buildings and infrastructure that meet the needs of our communities.

“With the right actions taken from the Government to address our industries joint priorities, we can tackle the challenges and exploit the opportunities that Brexit will bring. But unless we fix the housing crisis and address the economic imbalances in our economy, the UK won’t be in a position to compete internationally.”

Stephen Wilkinson, Vice President of the Royal Town Planning Institute, concluded “The UK is a world leader in environmental and building standards and in the professions which are involved in them. UK’s town planning expertise and university courses are among the most sought after in the world. Leaving the EU could present a great opportunity for the UK, but it should not be associated with a drive to the bottom in the environmental and building standards which future generations will live with.”

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UK construction sector moves closer to stabilisation in August

UK construction companies indicated a sustained reduction in business activity during August, but the pace of decline was only marginal and much softer than the seven-year record seen during July. New order volumes also moved closer to stabilisation, with the latest reduction the least marked since May. This contributed to a renewed rise in staffing levels across the construction sector and a rebound in business expectations for the next 12 months. However, latest data indicated a further steep acceleration in input cost inflation.

Purchasing prices rose at the fastest pace for just over five years amid reports that exchange rate depreciation had acted as a catalyst for increased charges among suppliers of construction materials.

At 49.2 in August, the seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI®) remained below the 50.0 no-change threshold for the third consecutive month. However, the index was up from July’s 85- month low (45.9), and the latest reading signalled the slowest pace of decline since the downturn began in June.

Sub-sector data pointed to much slower reductions in housing activity and commercial building than those recorded in July. In both cases, the rate of contraction in August was the slowest for three months. Meanwhile, civil engineering activity stabilised in August, following a reduction during the previous month.

Reports from survey respondents suggested that Brexit uncertainty continued to act as a brake on the construction sector during August, especially in terms of house building and commercial work. However, a number of firms noted that sales volumes had been more resilient than expected. Some panel members also commented on signs of a rebound in client confidence from the lows seen earlier this summer. Reflecting this, latest data highlighted that incoming new work decreased at the slowest pace since May.

Signs of a more stable trend for new business volumes resulted in a marginal expansion of staffing levels across the construction sector in Page 2 of 4 © IHS Markit 2016 August. However, subcontractor usage continued to decrease, and rates charged by sub-contractors rose at the second-slowest pace since June 2013.

Construction firms also cut back on their purchasing activity in August, which extended the current period of decline to three months. Softer demand for construction materials resulted in the least marked deterioration in supplier performance since April.

August data indicated that input cost inflation picked up for the third month running and reached its highest level since July 2011. Survey respondents overwhelmingly linked the latest rise in input prices to exchange rate depreciation.

Looking ahead, construction firms pointed to a rebound in business confidence from July’s 39- month low. Although the degree of positive sentiment was the highest since May, it remained close to the weakest recorded over the past three years.

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI®, said “The downturn in UK construction activity has eased considerably since July, primarily helped by a much slower decline in commercial building. Construction firms cited a nascent recovery in client confidence since the EU referendum result and a relatively steady flow of invitations to tender in August.

“However, the latest survey indicates only a partial move towards stabilisation, rather than a return to business as usual across the construction sector. There were still widespread reports that Brexit uncertainty had dampened demand and slowed progress on planned developments, especially in relation to large projects. As a result, total new order volumes continued to fall during August, which stands in contrast to the three-year run of sustained growth seen prior to May 2016.

“Despite another month of reduced output, the latest figures can be viewed as welcome news overall after a challenging summer for the construction sector. The move towards stabilisation chimes with the more upbeat UK manufacturing PMI data for August, and provides hope that the near-term fallout from Brexit uncertainty will prove less severe than feared.”

David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said “Purchasing costs went up at a rate not seen for half a decade, as the impact of the weak pound was felt by the construction sector. Firms reduced their purchasing volumes as a result, as new orders and activity continued to fall – though at a more moderate rate compared to last month. Costs for energy and raw materials such as steel and timber were highlighted as company margins were squeezed.

“Employment levels recovered to a modest degree, though at the second-slowest pace for three years. Some firms reported that they planned to increase staff numbers in hopeful anticipation of a surge in activity towards the end of the year. Business sentiment was moderately more positive than that seen in the immediate aftermath of the Brexit vote.

“After the shock of last month’s seven-year low in the overall index, the picture now is more about stabilisation than searing growth, as the sector remained in contraction. The housing sector continued its downward slide, but the drop in activity was much softer in August.”

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Skills, not Brexit, the main threat to construction industry

Worsening skills shortages, rather than uncertainty over Brexit, are the main threat to the UK construction industry, according to leading recruitment company for the construction industry.

A number of commentators have suggested that the main threat to the industry is the knock on effects of Britain’s decision to leave the European Union. However, an analysis by the construction and rail recruitment specialist found that a lack of skills poses the biggest potential risk to future productivity.

Paul Payne, managing director of One Way, comments “While numerous people have suggested that Brexit presents challenges to the construction industry, the idea is actually a bit of a red herring and we’ve seen little change since the result except for some natural hesitation brought on by the ‘Armageddon scenarios’ being pumped into the market. We’re as busy now as we were before the referendum and the real issue – the crippling lack of skilled professionals in this country – is being overlooked because of all the noise around Brexit.

“Yes, the construction industry has benefited from being part of the EU as it has given the sector access to a lot of workers who have moved over and have filled lower skilled roles, however we’ve never seen any great influx of skilled professionals who can work as design managers or quantity surveyors, for example. These people are needed across the entire industry and in related fields like civil engineering and currently there are far, far too few of them. More robust and well prepared hiring firms like ourselves will always have the resources to be able to pluck individual experts from the EU regardless of changes to freedom of movement laws, but in reality there is no quick fix. The only solution is to focus on ‘growing our own’, for example, through targeting more apprentices and youngsters at school level as well as widening the scope of people who are potentially interested in working in the industry to include more women and professionals from diverse backgrounds. Even at the moment when there are a number of major projects being put on hold there simply aren’t enough people in the market to meet demand. Imagine what the situation will be like when the economy picks up and they’re given the green light. Ultimately, something needs to happen quickly as we’re rapidly approaching a breaking point where productivity will be affected.”

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No sign of a Brexit impact on construction in June with £6.2 billion worth of contracts awarded

After an eventful final week of June with a series of shocks sent through the economy, the construction sector managed to hold strong, with new orders reaching £6.2 billion on the month, the highest figure of any month so far in 2016.

According to the June edition of the Economic & Construction Market Review from industry analysts Barbour ABI, the two stalwarts of the construction sector; residential & infrastructure, both had year on year rises in June, with contract values increasing by 26 per cent and 14 per cent respectively.

London regained the top spot for construction contract value by location back from Scotland after it held the position over the last two months, mainly due to a number of major renewable energy projects. London’s construction boost this month was helped greatly by the award to develop the Bechtel House Hammersmith valued at £275 million and the first phase of the £100 million Royal Albert Dock project. Both these major schemes help propel office construction to a total of £650 million worth of contracts awarded on the month, contributing to 81 per cent of all commercial and retail construction value.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “With the majority of the sector under the assumption that the UK would not vote to leave the European Union the result left many surprised, and our June figures are under the assumption that it would be ‘business as usual’.”

“We have seen housebuilder stocks fall in the wake of the vote and anecdotal evidence that projects are being cancelled. However, that is not evident in the data as of yet and it is a case of wait and see in terms of the impact Brexit may have.”

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Backing Britain is best

As someone who spent most of my childhood in rural areas, visits to London in the seventies were memorable for the bright lights of the West End, trips to the theatre, and a strange figure who tramped up and down Oxford Street carrying sandwich boards declaring “THE END OF THE WORLD IS NIGH”. Eventually we ceased to see him, though there have been plenty of doom-mongers since his time forecasting the end for humanity: such as former broadcaster, David Icke and more recently, David Cameron.

Whatever one’s viewpoint on the viability of our membership of the EU, most reasonable people would concede that the Prime Minister employed some pretty graphic predictions to try and persuade the public to stick with the project. In the end none of the dire warnings – nor the appalling warning on state pensions, uttered in the final days of campaigning as Project Fear morphed into Project Threat- were enough for the Establishment elite to divert the Eurosceptic majority. Indeed as I watched the PM’s wretched resignation speech in the immediate aftermath, I wondered just how large the majority would have been had he not mobilised the supposedly independent Whitehall machine to back Remain: 60-40, 70-30? For most of the people I know who backed the supposed status quo, did so despite deep misgivings over the EU’s trajectory of travel; opting instead to avoid any financial uncertainty.

So what did that financial shock actually look like? On the Friday morning, once the count became clear, shares in FTSE 100 and FTSE 250 companies plunged by as much as 40 per cent – before bouncing back strongly in the afternoon.

The UK’s housebuilders were amongst the hardest hit, but I am pleased to report that I stuck to my strategy stated in an MMC Magazine editorial, to hold my stocks throughout the Referendum campaign; and added to them substantially as the drama on the City’s trading floors unfolded.

I was in good company, however, as Berkeley Homes’ boss Tony Pidgley added approaching a million pounds to his personal stake in the regeneration specialist; and even Dame Kate Barker – a non-executive director of Taylor Wimpey – invested thousands in the hugely discounted stock.

You may recall it was Ms Barker who put her name to a report on housing supply in 2004, when Gordon Brown was still Chancellor, revealing how far short we were of the necessary number of new homes required. The Cowdenbeath Clunker famously went on to announce he was going to oversee the number of completions rise to 250,000 a year, just before the Credit Crunch and output fell to under 100,000. In case anyone is concerned about lack of demand in the foreseeable future, we have never got anywhere near the quarter of a million figure in the years since; while population rise has put further pressure on housing, schools, hospitals and other facilities.

Sterling or Gold?

Gold is always viewed by investors as a safe haven during turbulent times, while the Pound suffered a downward adjustment roughly half of what many economists had predicted was due for some years. And as I write, the lunchtime news is reporting a renewed drop in Sterling due to City jitters over commercial property sales, but this is also expected to prompt a further cut in the base rate to 0.25 per cent: which will bolster the attraction of house purchases if it is passed on to mortgage borrowers. Meanwhile confidence seems high in major manufacturers such as Rolls Royce, for whom wider markets look more accessible post-Brexit.

I am though sympathetic to businesses such as a wood machining company located near me, which reports it cannot pass on the currency connected price rises for its timber supplies from Europe, to customers here. In every scenario there are winners and losers.

Not only have the CBI back-tracked on its forecast of financial Armageddon should we vote Leave, but I have been encouraged by much of the widespread reaction to the Referendum result.

The building services research body, BSRIA, for instance declared it was ‘business as usual’ for its members and that the construction industry should remain confident and optimistic about the opportunities out there for existing and new industry projects. Indeed BSRIA is committed to offering ‘extra service to members during these uncertain times.

Julia Evans, Chief Executive, BSRIA, said: “Now that the dust has settled a week on from the Brexit decision – for BSRIA it is definitely business as usual – we are where we are. There are opportunities out there for our members to garner new work and deals – we all just need to find them.

“Against a backdrop of political and ‘economic spaghetti, BSRIA can lead and support its members into a bright new future. It is a brave new world. We appreciate there is certainly political turmoil, noise and volatility in Westminster – but BSRIA needs to join in this debate.

“As an industry – we must now start to shape future policy. Indeed it is a chance to revise industry regulations and to renegotiate the framework for the future and find new trade rules.

“We need to protect what has already been invested in and make the most of our assets – especially – investments and buildings. And ensure that investors have confidence in our industry. I was especially encouraged to learn that government ministers have begun efforts to reassure industry leaders that housing and infrastructure spending will not drop and in fact both will become ‘more important, not less’ after Brexit.”

Another positive perspective came from The Vinden Partnership, talking to UK Construction Online. MD Peter Vinden stated: “The effects of the result of the EU referendum are still being felt, with some of the initial reaction bordering on hysteria. The country now needs strong leadership to steady the ship and put Britain back on course.

“Instability surrounding the pound and the markets were inevitable once it became clear Britain had voted to leave the European Union. As the posturing stops and serious negotiations begin, it will become clear that Britain will not turn its back on trading with Europe. Likewise Europe, despite some of the more unhelpful comments being made from certain quarters, will realise it needs to maintain a favourable trading relationship with Britain.

“We have seen EDF confirm that the Hinkley Point power station project will remain unaffected by the vote. Likewise, Huawei will be pressing ahead with its billion pound investment programme.
“Britain will also be able to pursue advantageous trading relationships with other parts of the world. Already we are seeing trade talks begin with the likes of Australia, Canada, India and South Korea. The Brexit decision should be viewed as a great opportunity and we need to reinforce the message that Britain is open for business.”

Another point worth making is regarding the post-Referendum status of European nationals already here – including the many thousands working in construction. As I wrote in MMC – does anyone imagine that the day after a vote to Leave that Nigel Farage was going to insist on deporting his German born wife?

In fact the phalanxes of foreign staff – mostly salaried by the NHS – posting pictures of themselves on line (during work time?) with placards parading their nationality, are indulging in their own brand of scaremongering. How is their future status any different to that of an American, Australian, Indian or Nigerian living and working in this country?

In fact one of the few things our politicians seem able to agree on is that there will be no removal of EU citizens already resident in the United Kingdom; while most Brexiteers favour a points based system which will continue to admit people of any nationality whose skills are needed.

In time, with a fairer, more tightly controlled immigration system – rather than an open door to 500 million irrespective of their attributes or intentions – then we may just manage to balance our building and public services provision with demand. And then we will be in a far better position to offer sanctuary to genuine asylum seekers; for which this country has an admirable record going back centuries.

Remember when the monstrous Idi Amin launched his racist campaign against Ugandan Asians in the 1970s, we were able to accommodate some 30,000 people who arrived with virtually no possessions. But it was a far easier ask than trying to absorb 300,000 migrants, year after year.

Hopefully David Cameron and his taxpayer funded billboards will soon be just a bad memory, while I hope we can all find a way to work together and recall another government as well as a business backed campaign from the Seventies: “I’m backing Britain”.

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Carillion feeling positive following split from EU

Multinational facilities management and construction services company Carillion have released a half-year trading statement which suggests that Brexit will not affect them in the short term, although the long term changes are yet to be seen.

The statement highlighted that despite the economic uncertainty prior to the referendum and the subsequent fallout afterward, their support services have experienced revenue and margin growth and their work winning, order book and pipeline of contract opportunities are still strong.

Overall, the Group remains on track to make further progress in 2016.

The statement said “We continue to expect our full-year performance to be led by revenue and margin growth in support services, with Public Private Partnership projects, Middle East construction services and construction services excluding the Middle East also performing in line with expectations. Therefore, with revenue visibility for the full year of 97 per cent and a strong pipeline of further contract opportunities, the Group remains on track to make further progress in 2016.

“The referendum vote in favour of the UK leaving the European Union has obviously created uncertainty for the UK economy as a whole and therefore for businesses generally, including Carillion, and it is clearly too early to predict the extent to which businesses will be impacted by this result. However, Carillion has no significant operations in Mainland Europe and prior to the referendum we undertook extensive work to assess the possible impact on our business of a vote to leave and we have put in place robust plans to manage this outcome.”

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Is HS2 under threat from Brexit?

Suggestions have been made that HS2 is under threat of being cancelled, following the UK’s vote to leave the EU.

“The priority for the Government at this time will not be big sexy projects such as HS2,” said Lord Berkeley (Labour peer and Chairman of the Rail Freight Group).

This was a sentiment echoed by Richard Threlfall, head of infrastructure at KPMG, who said: “Getting attention on important strategic infrastructure decisions, I fear, has just got significantly harder.”

Before the Referendum, in June, Prime Minister David Cameron addressed Yorkshire residents at the Yorkshire Post’s offices in Leeds, and warned of uncertainty for the project if Britain left the EU.

“If we stay in [the EU] all our plans are fully intact and that includes HS2, and what we have said about HS3, and the overall rail investment programme,” he said.

“If we come out, of course I’m sure we will want to try and maintain these important investments. But when you hear nine out of ten economists, the Bank of England, the Treasury, the IMF and now the National Institute [of Economic and Social Research] all saying our economy will be smaller and will generate less tax revenue, obviously that does threaten potentially some public spending programmes.”

With uncertainty over the future leadership of the Conservative party and whether the new leader will be supportive of HS2, critics of the project are hopeful.

However, HS2 spokesman Ben Ruse said in RAIL Magazine “We are continuing to make HS2 a reality. It is business as usual and could very well be that HS2 is need now more than ever.”

Written by Stefanie Browne
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EU exit delivery plan needed to boost construction sector

New construction statistics for June, which show the weakest sector performance for seven years, are a cautionary sign of the damage that current uncertainty is causing to the building industry.

Brian Berry, Chief Executive of the Federation of Master Builders, said “June’s PMI figures, which show a huge dip in construction output, reflect our fears that uncertainty over the outcome of the EU referendum would hit our sector.

“In the wake of the UK’s vote to leave the EU, there is a growing concern that this period of uncertainty is only just beginning. Construction is an industry that is particularly vulnerable to dips in confidence and it appears that many clients were hesitant to commit to new projects as they were unsure of what the future held.

“An exit road map is needed to show what steps are going to be taken to withdraw from the EU.

“Today’s results underline the importance of clear leadership from the Government – it’s imperative that it attempts to offset any uncertainty firms will be feeling. Today’s announcement by the Chancellor that he would seek to lower corporation tax to below 15% is a positive step, as was Greg Clark’s recent reaffirmation that the Government will still aim to build one million new homes by 2020. However, much more needs to be done. Dithering over infrastructure decisions will send out entirely the wrong message to firms of all sizes.

“More than ever, investment is needed in a sector that generates £2.84 in the wider economy for every £1 spent. Public investment in our sector could play a vital part in warding off an economic slump, but today’s findings show that it will be far from business as usual.”

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