15th January, 2020
As the UK prepares to Brexit on 31st January 2020, there is a substantial question mark over the impact of this on the UK construction industry. When pondering this question it is important to clearly distinguish between the public and private sectors and the differing impact Brexit will have on each of these.
The amount of public sector projects should remain largely unchanged, in fact under proposed spending plans by the Conservative Government the number of public sector projects is likely to increase in the short term with plans to spend £100 billion on ‘public infrastructure’ in the next five years. Whilst in reality this figure reported is unlikely, the Tories have outlined specific policies relating to the upgrading of 20 hospitals, 40 new hospitals, £2 billion on sixth form colleges, a national electric car charging network and continued improvements to the train and road networks. Whilst all of these may not come to fruition, it is likely the radical Labour manifesto and swing of Labour voters supporting the Tories will prompt an increase in public spending.
The private sector faces greater uncertainty, however the early signs are positive. In reality, the UK has had three and a half years to prepare for Brexit and the implications this will have on companies, investment and trade with the EU. The stock market surge after the landslide Tory majority in the December election, which all but confirmed Brexit taking place this month, suggests the same investors with business interests and real estate holdings in the UK are confident of success in post-brexit Britain. The RICS also publicised this week that house prices have risen by over 2% in the year from November 2018 to 2019, further suggesting confidence in the UK market.
The reality for both sectors is that Britain is still a worldwide powerhouse with an expanding population. These two factors combine to mean constant upkeep, upgrading and maintenance to existing infrastructure, as well as the ever increasing need to expand infrastructure. It is also likely that in the short term this need is going to be rapidly increased as a result of Brexit with capital works projects relating to borders, security and infrastructure spending to replace EU funded projects. The number of new homes required in Britain continues to rise annually, the populated areas of the country requiring new and improved transport links continues to increase and the City of London continues spiralling higher and wider in size. The short term outlook after Brexit is certainly positive for the UK construction industry.