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Should I stay or should I go?

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Britain’s undecided split on the future of the nation’s inclusion in the EU will unquestionably have an effect on business and the way it is done in Britain. Everyone has an opinion on the UK exit, whether it will be for the better or worse. A referendum on whether to leave or stay in in EU is probably the biggest political decision in decades and while the debate rages on around us, both individuals and businesses will have concerns on how it is going to affect them and their industry.

For me the soundtrack of The Clash’s “Should I stay or should I go” is always spinning around my head when I think of that referendum, which is to be held on Thursday the 23rd of June. If we stay as a member of the EU or if we part ways and break up, there is no doubt it will have major impacts on many industries.

The UK construction industry is massive! According to a recent statistics, published from the House of Commons Library. In 2015, there were 2.1 million jobs in the UK construction industry which is a massive 6.2% of the working population. (Construction industry: statistics and policy, October 2015)

In 2014 Construction output was worth an astronomical £103 billon, which made up a total of 6.5% of the overall economy. This is the biggest increase since 1990 and in real terms is an output rise of 9.5%. Therefore, it is a positive outlook for the construction industry, for overall growth, continual developments in the private sector and of course job opportunities.

I speak to a lot of contractors who are all for “British workers for British jobs” and they make no bones about sitting firmly in the leave campaign. But, what will be the impact on the construction industry if Britain were to exit the EU?

Increased skills shortage

Labour and access to workers is imperative for the industry. It seems the biggest worry to the sector is how it will affect the skills needed for continual development and project delivery.

Without access to labour the construction industry would struggle to function. The industry has always relied heavily on foreign workers to fill both skilled and non-skilled job roles. With recent growth due to rise even further this will also see a sharp increase in employment opportunities in the construction industry.

If the vote is to leave the EU, many industry leaders have predicted that it will lead to further shortages in construction labour skills. The industry is already suffering with finding skills from within the UK, so is reliant on skills from overseas. The Home Builders Federation said, “Whilst the industry is recruiting heavily and training thousands of young people it does currently rely on skilled labour from abroad”.

“If it is to maintain the significant increases in output of the past two years it is imperative it has access to an adequate supply of labour. In the event of us leaving we would certainly be pushing government hard for guarantees that sufficient skilled foreign labour would be accessible.” (Home Builders Federation, 2016)

Cost to construction firms

The costs to firms where salaries are concerned will rise. Data from the Rics (Royal Institute of Chartered Surveyors) showed that construction wages had risen by 6% in 2015. The UK average is 2%, resulting in a sharp increase in the cost of wages. The majority of construction firms reported this has led to financial constraints within their business. (RICS, 2016)

Costs of materials import

If Britain does decide to exit the EU, it is no doubt going to have an effect on trade.

According to campaigner, Lord Rose who heads the Britain Stronger in Europe group, recent research suggests that trading with Europe would mean having to comply with World Trade Organisation rules, which would lead to an increase in cost to businesses and consumers. (Britian Stronger in Europe, 2016)

The UK’s largest import markets in order are Germany, China, Italy, the Netherlands and Sweden. As you can see 4 of those markets are within the EU so if we were to leave on the 23rd of June, the future for imports and the costs to business looks challenging. (TRADING ECONOMICS, 2016)

The Confederation of British Industries have already publicly voiced their support for Britain remaining within the EU, along with other business bodies including The London Chamber of Commerce and Industry (LCCI), The Federation of Small Businesses (FSD) and the Institute of Directors (IoD). (Confederation of British Industries, 2016)

With the public sector facing difficult decisions in terms of their workforce and where to make savings, the last thing the construction industry needs is yet more uncertainty surrounding jobs and projects. To paraphrase the famous line from The Clash, if we stay will it be trouble or if we leave will it be double….

What are your thoughts? I’d love to know so please do get in touch.
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