The Impact of Brexit on the UK Construction Industry Employment

On the 24th of December 2020, the European Union (EU) and the United Kingdom (UK) finally concluded their pending post-Brexit trade deal. They agreed on a deal on the 1st of January 2021, and it came into play immediately. Innovation has been constantly developed in the industry as a symbol of the forthcoming change, but the outcome of this innovation is still in question. The trend toward offsite assembly, the wider application of digital methods and the heightened urgency to combat climate change are some factors that would lead to more cooperation and a more sustainable industry.

This article will discuss the effect of Brexit on the UK construction industry and the hurdles currently experienced in the industry.

Impact on Construction Workers

The people who work in the construction industry will largely feel the reduced freedom of natural movement. The new system of immigration based on points governed by TCA will very probably eliminate the roles of general labourers. The UK is already facing the problem of a labour shortage of skilled workers; the sector statistics show that as much as 37% of London construction workers come from EU countries. There is a risk that the price of the project will rise if the demand for labourers exceeds the available supply.

Labour Shortages

One of the main consequences of construction in Brexit is labour shortages. The UK and the EU's free movement of people has come to an end and resulted in the reduction of the qualified supply of workers in the UK. Experts draw attention to the fact the sector has to be supported in the recruitment process of workers, as fewer and fewer people from the EU go to the UK to work. Such a situation puts construction companies in an unfavourable position because the completion of projects takes longer, and the overall labour costs increase, making it difficult for the companies to remain competitive.

Regulation Changes

Brexit has had a dramatic effect on regulatory requirements and the industry's standards with the construction industry. Construction News refers to the UK as a country which has developed standards for construction materials and products as additional compliance costs for construction companies. However, construction companies exporting products to the EU shall also observe new legislative requirements that complicate already complicated business in the sector.

Skills Shortage

Since the UK eased its restrictions related to COVID-19, the economy bounced back, and construction works commenced all over the country. It showed the lack of qualified and unqualified employees in the construction industry, which was very visible. Being an EU Member State, the industry might gain access to the workforce from other European Union countries under the principle of free movement. Yet, this will not be the final stage for Brexit. In this light, the CST Network Analysis articulated that the next ten years can see about a million construction workers retiring, which would then result to the construction industry having the need to fill over a million vacant job positions.

New Opportunities

Even though there are many challenges, from the UK's point of view, the risk of exit from the European Union may bring some possibilities. Take the UK as an example. The government declared that it would spend public funds on infrastructure projects as part of policy to stimulate the economy. This investment will represent a new chance for construction companies and may help tackle some of the challenges of Brexit.

Materials Shortage

The UK construction sector is currently experiencing a 24-year high in the number of projects underway, so there is an enormous demand for materials. This has resulted in the obvious supply chain problem in the whole industry. One reason why the construction industry is experiencing a shortage of materials is the lack of lorry drivers in the country. Therefore, taking raw construction materials to different corners of the United Kingdom has become costlier.

Longing Impact

Overall, Brexit is a big challenge for the construction industry, both positively and negatively. On the one hand, it has generated a lot of confusion and shakiness, mainly with regard to talent and material access as well as regulatory frameworks.

However, it was also a challenge for the industry that had to rediscover new ways of doing business, improve its competitiveness, and be more innovative to fit the new market rules. The construction industry should be able to respond by tackling the challenges and benefiting from the opportunities that are arising after Brexit. We must be ready to partner and cooperate with all the stakeholders, including the government, industry bodies, trade organisations and individual companies and workers.