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Brexit: “Business as usual,” says BSRIA

After last week’s shock decision for the UK to leave the EU, BSRIA says it is ‘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.

BSRIA have stated that they are committed to giving ‘extra service to members’ throughout this uncertain time.

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. The Mayor of London has also announced to boost housing.”

Industry cannot afford any period of parliamentary inaction and uncertainty on non-EU related issues, whether two years or more in length, and BSRIA seeks urgent reassurance from government that this will not be the case.

BSRIA is a non-profit distributing, member-based association, providing specialist services in construction and building services. More information at www.bsria.co.uk.

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“It’s not the end of the world” – A post-Brexit construction industry

The result of last week’s referendum on whether we remain or leave the EU came as a massive shock to everybody – the construction industry being no exception. We have been plunged into the unknown and understandably concern and fear has arisen. However, it isn’t all doom and gloom for the construction industry, and regardless of your opinion on the result it is everybody’s responsibility to roll up their sleeves and help make this work.

Strength in unity

Following 52% of UK voters deciding to leave the European Union, organisers of the UK’s largest construction event have called for a united front in the industry to face the challenges and opportunities ahead.

Nathan Garnett, Event Director for UK Construction Week, commented: “A new dawn for UK construction begins here. It is inevitable that our industry will experience a period of uncertainty and adjustment, but the construction sector has proved time and time again to be incredibly resilient. Now the result of the referendum is clear, we, as an industry, must move forward together with confidence. Leaving the EU will likely mean UK construction firms will be looking to invest in British products and services like never before.

“The UK boasts many long-term infrastructure projects and the Bank of England have made sound contingency plans for leaving the EU. The UK also has the foundations for a boom in house building, and the industry must and will be committed to meeting the national need for housing. Leaving the EU will inevitably attract new investors to our shores offering new opportunities, and that will happen sooner rather than later. The last few weeks and months have been uncertain for the UK construction industry, but now is the time to embrace the change and these new opportunities.”

“The reports of my death are greatly exaggerated.”

As social media reverberates rumours that the bottom has fallen out of the industry and the wider economy overall, many are actually quietly reporting that both the overall uncertainty and the subsequent result of the referendum have actually had little to no impact on their business activity.

In a year-end trading statement released this morning by Redrow housebuilders, Chairman Steve Morgan has indicated that annual profits were expected to be at the upper level of city expectations of £240m. “Although it is too early to tell whether Brexit will have any effect on future sales, initial feedback is that sites remain busy, reservations continue to be taken.

“Indeed, we witnessed long queues and strong reservations at new sites launched last weekend.”

David Orr, Chief Executive at the National Housing Federation has highlighted the importance of a strong stance as an industry. Speaking on behalf of the Federation, he said “We recognise the uncertainty that this result will bring to the sector and we are working with our housing association members to support them to continue delivering the homes and services this country needs. Whatever happens there is still a housing crisis and we remain committed to ending it.”

David Brown, the head of agency Marsh & Parsons, addressed the widespread moral panic gripping the housing sector in the Guardian. He pointed out that regardless of the result of the referendum there was still plenty of pent-up demand in the UK housing market “and a leave vote doesn’t change that overnight.”

He added: “When you think back to before the financial crisis and the volume of transactions we were witnessing on an annual basis, there’s clearly scope for further improvement. The decision to leave doesn’t alter the fact that plenty of people have to and still want to move.”

One reason perhaps that indicates that Brexit will not impact the construction industry quite as heavily as other sectors is that many construction companies work exclusively within the UK. A recent CBI study into the implications of British withdrawal from the EU, showed that construction is the second most domestically focused major UK sector, surpassed by a hairs breadth by Government. “It’s a domestic market, so while there are some that operate internationally, what really affects them is what they do in the UK,” says Suzannah Nichol, chief executive of Build UK.

Home-grown talent

Whilst the skills gap is likely to worsen in the short term, Brexit is perhaps the catalyst for change long term regarding the training and retention of a better homegrown workforce. According to the Federation of Master Builders (FMB) The UK construction industry has been heavily reliant on migrant workers from Europe for decades now – at present, 12% of the British construction workers are of non-UK origin.

Brian Berry, Chief Executive of the FMB, said “we need to ensure that we invest in our own home-grown talent through apprenticeship training. We need to train more construction apprentices so we are not overly reliant on migrant workers from Europe or further afield. That’s why it’s so important that the Government gets the funding framework right for apprenticeships – when you consider that this whole policy area is currently in flux, and then you add Brexit into the mix, it’s no exaggeration to say that a few wrong moves by the Government could result in the skills crisis becoming a skills catastrophe. The next few years will bring unprecedented challenges to the construction and house building sector, and it’s only through close collaboration between the Government and industry that we’ll be able to overcome them.”

In summary

In summary, the biggest immediate threat to the construction industry following news of our departure from the EU is widespread confusion, stalling due to a feeling of insecurity and failure to act going forward. Demand remains strong as shown by reports from some of the major contractors and housebuilder’s across the UK. The construction sector remains strong but we need to keep moving and resist succumbing to hype in order to ensure it stays this way. It has to be business as usual. Keep calm and carry on!

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EU is a crucial market for UK steel, warns Labour MP

Angela Eagle MP, Shadow First Secretary of State and Shadow Secretary of State for Business, Innovation and Skills, commenting on the warnings from UK Steel about the impact of a leave vote on the industry, said “UK steel is a vital foundation industry. But with the industry in crisis and teetering on the brink, leaving the EU could push it over the edge.”

“The EU is a crucial market for UK steel, accounting for over half of our exports. And by working together across the EU, we are better able to stand up to the illegal dumping of Chinese steel.

“The leave camp have cynically used the steel crisis to further their aims. But the industry is united. Both the employers and the steel trade unions all say that staying in the EU is essential for the future of this foundation industry.”

This is a stark contrast to the counter argument made by UKIP leader Nigel Farage who has earlier stated “If we vote to Remain on June 23 it is the end of the steel industry in this country. Simple as that.” He suggested that only by voting leave can UK steel truly have a “fighting chance” of survival.

The Prime Minister David Cameron has also expressed the opinion that it is vital that EU markets remain open to British steel-makers, saying “Around 50 per cent of British steel production goes into the EU. So we need to be in there working with others to stop the unfair dumping of steel into Europe by other countries and we’ve done that.

“But we need to be in there making sure the markets are open.

“If we were on the outside we might well find that is was our steel that was having those tariffs and those taxes put upon it.”

One thing that both sides of the debate are in agreement on is that there are “no guarantees of success” in saving the UK steel industry long term because of “the problems the steel industry faces worldwide.”

How do you think the referendum will affect UK steel? Let us know in the comments below!
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Weak information clouds construction bosses referendum decision

A survey carried out by the Federation of Master Builders (FMB) has revealed that 80% of construction bosses of SME’s will vote in the upcoming European Union referendum according to their own personal beliefs rather than casting a wider business interest-based vote overall.

The poll results indicate that more than 50% of small construction company owners feel like they haven’t received enough relevant information on the issues that might affect their businesses should we stay or leave come referendum time.

40% of respondents said that the main appeal to leave the EU would be the ability to “freely legislate” to meet the demands of British business. The argument to remain seemed largely based on the economic stability provided by the EU.

Only 17% of respondents said that they would put their business interests first when it came to deciding on the issue.

Brian Berry, Chief Executive of the FMB said “The outcome of June’s referendum on Britain’s membership of the EU will have significant ramifications for construction SMEs, regardless of the outcome. That’s why it’s fascinating that more than 80% of our members have indicated that their vote will be determined by their personal beliefs ahead of anything else. It just goes to show that although it’s important to explore the business case for leaving or remaining within the EU, for many people their decision will be based first and foremost on other drivers. These could include the desire to be part of the wider European community or a compulsion to reclaim British national sovereignty.

“However, a recent survey by Ipsos MORI revealed that the public want to hear the perspective of SMEs more than any other type of business. Unfortunately our research shows that the people who run small construction firms feel that the ongoing debate over Brexit has done little to enlighten them on the issues that really matter, with 52% stating they do not feel well informed on the issues that might affect their businesses. This is perhaps a reflection of how few of the impartial facts that are so widely craved have actually been offered by either side. No wonder then, that the vast majority of builders will be opting to vote based on their wider personal beliefs, when the economic and business case of each argument remain so unclear.

“What’s clear is that few sectors are more sensitive to uncertainty than construction. Already, there are signs that the unpredictability surrounding the outcome is beginning to sag on industry confidence as investment is deferred and home owner confidence wanes. This explains why continued economic stability has been cited as the best reason to remain in the EU. On the other hand, 40% of SMEs identified the potential freedom that Brexit could grant the Government to set legislation that truly meets the needs of British business as the biggest potential positive of Brexit.”

How will you vote? Be sure to take our one-click poll at the top right-hand side of this page!
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How will YOU vote in EU referendum? The results:

We polled both our twitter following and our database of construction professionals about how they were planning on voting in this coming referendum. Here is what they came back with.

Of the 75 respondents, which consist of building specifiers, contractors, architects and decision makers within the industry, 65% voted to remain in the EU and 35% said that we should leave. What are your thoughts?

Let us know in the comments section below!

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How will YOU vote in the EU referendum?

The EU referendum is currently dividing opinion within the construction industry. It did in 1975 and now once again in 2016 we find ourselves asking “should we stay or should we go?” How are you planning on voting? Take part in our anonymous twitter survey below and feel free to explain your reasons or concerns in the comments section below!

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80% of CBI members think being in EU is best for their business

 

The The Confederation of British Industry (CBI) Chairmen’s Committee has taken the final step in endorsing the leading business group’s mandate to make the economic case for the UK to remain in the EU. It comes after the CBI reaffirmed its member mandate following a rigorous governance process through the organisation’s “business parliament” and publication of a new member survey.

A clear majority of CBI member companies – which together employ nearly 7 million people, about one third of private sector employees – believe that it would be in the best interests of their business and the wider UK economy to remain inside the EU. This is according to an independent survey carried out by polling company ComRes.

The survey had 773 responses among small, medium and large firms across the whole of the UK. It reveals 80% of CBI members, when weighted to reflect its membership – including 71% of small and mid-sized business members – believe that the UK remaining a member of the EU would be best for their business. Overall, 5% say it is in their firms’ best interests for the UK to leave the EU, with 15% unsure.

The survey forms part of a thorough consultation process with the CBI’s governance network of three national councils (Scotland, Wales and Northern Ireland), nine regional councils, eleven standing policy and sector committees. This culminated in an endorsement from the Chairmen’s Committee – the CBI’s highest policy making body – which met on Monday. This round of 24 separate consultations has taken place over the last three weeks, with a clear majority in each meeting backing the business case to remain in the EU.

CBI Director-General, Carolyn Fairbairn said “The message from our members is resounding – most want the UK to stay in the EU because it is better for their business, jobs and prosperity. Walking away makes little economic sense and risks throwing away the many benefits we gain from being part of the EU.”

“Our members tell us that having guaranteed access to a tariff-free market of 500 million people, and to more than 30 global trade deals covering 50 countries, are significant advantages that outweigh the frustrations.”

“A minority of members want to leave the EU. We will continue to respect and reflect their views and campaign for EU reform to get a better deal for all businesses.”

“However, most CBI members are unconvinced that alternatives to full membership would offer the same opportunities. We have yet to see those who seek to leave the EU present a compelling vision of what this would mean for jobs and growth.”

“We will not align ourselves with any campaign. Though prosperity, jobs and future living standards matter to many people, we recognise there will be other considerations. It is not our place to tell people how to vote, but the CBI will play its role in making the economic case for remaining in the EU.”

On securing the CBI’s mandate and its role in the EU referendum, CBI President, Paul Drechsler said “Having secured a strong mandate from our members, the CBI will continue to play a role in shining a light on the business and economic issues at stake. We will seek to inform the public debate focussing on the implications for jobs, prices and prosperity.”

“The vast majority of our members tell us their businesses have gained from being in the EU. We have consulted every one of the CBI’s councils in the last three weeks, involving firms of all sizes and sectors across the UK. All councils agreed, many unanimously, that the CBI should make the economic case for remaining.”

“The referendum is a matter for the British people and it’s clear that the public will base their decision on a range of factors. The business and economic case is only one part of the story, but it is a vital one.”

“The job now for the CBI and business leaders across the UK is to set out the arguments as clearly as possible for the British public. The CBI speaks on behalf of members who employ nearly seven million people and we’re proud to represent entrepreneurs, ambitious growing firms, smaller companies and some of the UK’s biggest employers, spanning all sectors across the UK.”

What are your thoughts? Let us know in the comments section below!

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How will Brexit affect the construction industry? Two views:

The opening shots have been fired. Brexit is the big political issue of the year, and perhaps the decade. For those of us here in the present, it is going to be a busy few weeks in the run up to the EU referendum. Party loyalties will be tested to the limits. Industries will hold views. Businesses within those industries will hold competing views. Individuals within those businesses, within those industries will hold their own views, all often contrasting. Arguments based on reason, on attachment to tradition, on patriotic necessity, on economic planning, on their children’s future, and every other factor that influences us will compete for our opinions. www.nstraining.co.uk investigate.

As with every other industry, the construction industry has a variety of views on the prospect of Brexit, and I think it necessary for us to have views at our disposal before making our own decision. Here are thoughts from both the ‘in’ and ‘out’ EU camps:

In:

A survey by Smith & Williamson recently found that only 15% of construction executives favoured a UK exit from the European Union. A massive vote of confidence in favour of remaining part of the EU. The chairman of the property and construction group at Smith & Williamson, Mark Webb echoed the thoughts of quite a few commentators from the construction sector, when noting the reasons for favouring the UK remaining within the EU:

when considering that the key components of the sector are also cornerstones of the EU, access to labour and flexible working, it is less shocking. The survey highlights the concern within the industry that should a Brexit happen there is a very high likelihood of access to labour declining as margins are squeezed.

– Access to labour is essential for the construction industry, the worry of a Brexit from the EU seems to be rooted in access to labour. Renegotiated treaties following such a decision, may well take years, may well require drawn out negotiations, and may result in much less ease of access to labour. Simon Thomas, Managing Director of Asset International, writing for Huffington Post similarly focused on the necessity of labour to fill the skills gap in construction in the UK:

The first major issue is access to labour, without which the construction industry would be unable to function. The industry relies heavily on foreign workers to fill both skilled and non-skilled job roles, and always has done.”

A core principle of the EU is the right of free movement, which makes immigration between member states relatively easy and stress-free. For the construction industry, this provides a vital resource. An EU exit would mean that foreign workers would find emigration to the UK much more difficult. It’s logical that in this scenario those skilled individuals will instead take the easy option and cast an eye toward France, Germany, or Spain, where the right of free movement would remain intact.

– As a key resource, ease of movement for labour – a fundamental value of the European Union, unlikely to be curbed – the construction industry is unlikely to back a British exit from the European Union. As it stands, the construction sector is set to bounce back from a slow few quarters, and so demand for labour is likely to grow, which means either free movement from EU members is going to be a greater necessity, or the UK is going to have to invest in training (hi, we’re North South Training!) up a huge number of British workers to fill the gap.

Out:

Clearly the consensus from the construction industry is that the UK should remain within the EU. But dissenting voices are vital to any consensus. It challenges our assumptions, it engages on a deeper level, and it strengthens or weakens positions, until we come to a better understanding of the issue. When I see a figure of 85% in support of a position, I want to know the arguments against, because strength in numbers is not automatically an indication of truth.

Lord Bamford, the Chairman of JCB is a dissenting voice. He is convinced that a Brexit could cut the costs of bureaucracy so much so that any additional costs of leaving the EU would be easily covered. Bamford also rubbishes the ‘scare mongering’ of those who insist it would make trade far more difficult with other European nations, because he insists it is in everyone’s interests to trade openly and freely:

I think it would be, because I really don’t think it would make a blind bit of difference to trade with Europe. There has been far too much scaremongering about things like jobs. I don’t think it’s in anyone’s interest to stop trade. I don’t think we or Brussels will put up trade barriers.

– Further, he claims the red tape imposed by Europe can often make it easier to trade with those outside the EU:

It’s a burden on our business and it’s easier selling to North America than to Europe sometimes.

– Lord Bamford’s belief that similar trade deals with the EU in the event of a British exit will likely remain similar for the sake of the interests, seems to be echoed by Parliament’s own recent briefing:

If the UK wished to remain in the single market but outside the European Economic Area (EEA), like Switzerland, it would probably have to accept certain EU rules by arrangement. Whether these would include the free movement of people would depend on the outcome of UK-EU negotiations.

Most studies on the impact of migration on the UK economy have found weak or ambiguous effects on economic output, employment and wages on average

On the other hand, if the UK were to negotiate a relationship with the EU similar to the EEA states or Switzerland, it might find that it did not have any greater scope to control EU immigration to the UK than it did as an EU Member State.

You are going to hear a lot of contradictory arguments across industries, across unions, and across businesses on the benefits of staying or leaving the European Union. When an opinion appears strong, a contrary view will break it down, and vice versa. Ultimately it is up to us as individuals to weigh the arguments, and come to a rounded decision. On a personal level, I am in the 1/3 of voters who have not made a decision, and remain open to persuasion from either side. One thing is for sure, it’s going to be a spectacularly complex, information packed few months until the referendum arrives.

Written by Jamie Smith, Marketing Manager at www.nstraining.co.uk

 

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