So, in the UK the Brexit vote has come and gone and in the USA we now have a new president elect, who it would seem, supports the UK’s decision to leave the EU.
But how has this impacted the construction industry within the UK in the five months following the Brexit vote?
Willis Towers Watson published a high level document in October 2016 that painted a pretty bleak picture of the construction sector’s future economic growth, which was widely reported to be in official decline following two quarters of negative growth.
However, there now appears to be much more buoyancy back in the market with positive views being aired by those in the know. The Markit/CIPS UK Construction Purchasing Managers’ Index (November 2016) rose to 52.6 from 52.3 beating all forecasts in a Reuters poll and rising above 50 for the first time since May 2016.
Some of the major UK house builders such as Barratt have reported ‘business as usual’, while a survey carried out by Gibbs and Dandy for the Builders Merchants News (October 2016) reported that when building trade professionals were asked how they felt about the short to medium (1-5 years) future of the building industry now that the UK had left the EU, more than two thirds (69.5%) said they were optimistic, while only 12% were pessimistic.
Additionally, when asked if they’d experienced any change in their workload since the UK voted to leave the EU on 23 June, 14% had seen an increase in work, while 84% said their workload was about the same as before the vote.
So what does all this mean for the industry now that the dust is starting to settle?
Clearly there are still a lot of unknowns, and the High Court’s decision that Parliament must have a full debate before the final decision is made to enact Article 50 has only further deepened the confusion as to when and how the UK will be exiting.
However, what is becoming clearer is that many of the major infrastructure projects that were being planned prior to the Brexit vote, such as Hinckley Point C, HS2 and Heathrow Airport have all now been given the green light to proceed. This will have a major positive knock-on effect for all the contractors, manufacturers and suppliers vying for this business.
Google also approved its new £600m headquarters in the Kings Cross area of London and we have seen other major high profile projects staring to commence.
Home builders and those in the commercial student accommodation sector are sounding far more positive than in June of this year and overall, we are seeing a revival of spirits, which can only be beneficial in the long term.
While ‘watch this space’ is probably an overused term in the sector at the moment, the signs are definitely more positive than they were a few months ago.