The document discusses the potential impacts of Brexit on the UK construction industry. It may lead to higher costs of construction materials due to reliance on imports from the EU and a weaker pound. The end of free movement of people could result in a lack of skilled labor and make achieving housing goals difficult. Weakening of the labor market and currency fluctuations may disrupt supply chains, while uncertainty is limiting commercial construction and investments in the UK market.

1. What Brexit will mean for construction
Higher costs of the construction materials
End of free movement of people and labour
Growth of tender costs
Weaker labour market and currency fluctuations
Declining construction work (commercial)
Declining investments in UK market
The prices of construction materials are likely to rise. The UK relies heavily on imports from mainland
Europe (over £10 billion products are imported every year, including £1 billion of timber), so this means
incurring higher costs with longer waiting times. Up to 62% of building materials are imported from the
EU, and inflation is set to continue rising, with some businesses already reporting up to 20% higher fees.
The government wants to build 300,000 homes every year in England alone but, with businesses
struggling to find bricklayers, this goal may not be reached. After all, considering the free movement of
people and labour will soon stop, it’s easy to predict that the industry will suffer from a lack of skilled
personnel for years to come once we leave the EU. This may lead to a housing crisis.
Mace has predicted that tender prices could grow by 1.5% in 2020, in line with its previous estimates,
but warned that Brexit uncertainty and global issues risked exerting downward pressure in the future.
Weakening labour market and currency fluctuations – particularly the depreciation of the pound – are
two areas of concern, while it said that a ‘no deal’ Brexit had the potential to “significantly disrupt” the
construction supply chain.
Construction companies noted that rising risk aversion and tighter budget setting by clients in response
to Brexit uncertainty had held back activity, particularly in the commercial sub-sector. Commercial
construction activity fell at a steep and accelerated pace during August, which more than offset the
softer rates of decline in house building and civil engineering work.
In the UK, the uncertainty related to Brexit is limiting investments in the non-residential building market
and is also impacting the civil market negatively.