Construction firms not prepared for Brexit

A recent YouGov survey commissioned by leading audit, tax and consulting firm RSM, has shown that construction firms are behind other sectors in making preparations for Brexit.

While the survey found that construction firms had only taken 28% of actions needed to prepare for Brexit, the sector was also the most confident in the Government making a good deal, seeing some 60% of firms confident of a good deal compared to 45% across other sectors.

Other sectors are making more preparations across the board, with financial services, consumer and technology sectors the most prepared with 37% and 34% for the manufacturing sector.

Respondents cited a number of actions businesses need to undertake to prepare for Brexit, with respondents from the construction sector prioritising the establishment of EU subsidiaries or branches, lobbying the government, and preparing for potential import/export duties with the EU.

The index, which also shows whether companies are more optimistic or pessimistic on a scale of 0-200, shows that construction firms are more pessimistic about the impact of Brexit over a five year period (registering at 99).

By comparison, manufacturing sector businesses were the most positive, registering 126 on the index, closely followed by technology, media and telecommunications companies with an index score of 122.

More than 60% of firms agreed that the Government’s priority should be guaranteeing access to the single market, either through a new trade deal or continued membership. Firms however have wide ranging ideas on how this was to be achieved, with 22% per cent favouring the Canadian and Norwegian models respectively, 19%the Hong Kong or Singapore City State model and 17% the Swiss model.

Securing the rights of EU citizens in the UK came in second at 27%.

Kelly Boorman, head of construction at RSM said: “Given all the uncertainties surrounding Brexit, clearly businesses aren’t going to feel totally prepared, but the construction industry appears to be behind the curve compared to other sectors.

“There are real challenges ahead resulting from Brexit – not least the access to the right skills in the workforce. If, as predicted, there are one million EU citizens who decide to leave the country, then that war for talent is going to become even more intense, and costs will necessarily rise. The cost of imported materials will also continue to be a challenge because of exchange rate effects.

“Companies should be thinking ahead and coming up with creative ideas for plugging the skills gap. This could include engaging with schools and colleges to encourage more students to study STEM subjects, embracing diversity to bring more women into the profession, increasing apprenticeships and reforming talent management and training programmes.

“Lack of certainty around government spend and timing of large infrastructure projects as a result of Brexit will undoubtedly have an impact on the construction sector, along with a forecast reduction in inbound international investment which could see a further slowdown in commercial developments.

“On a more positive note, the commitment to increase the volume of houses built and made accessible through affordable housing and for first time buyers will help confidence in the market place.”

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