Brexit may mean Brexit, but it also means the government investing more in infrastructure.
Six months on from the historic referendum in which Britons voted to leave the European Union, many are none the wiser about the consequences.
While the government has given a deadline of when it will invoke Article 50 – court cases and parliamentary votes notwithstanding – the details of its negotiating stance are being kept under wraps until then. This means neither the construction sector nor any other part of the economy has much idea of what the true implications of Brexit will be, and even when the government shows its hand, so much will depend on the negotiating position of the EU in response.
However, there has been an acknowledgement that the UK is likely to suffer some sort of economic shock, even if it is a mild one, as it adjusts to new economic relationships. The government has seen this prospect and decided to shelve plans to balance the public sector finances by 2020, freeing up more spending. More importantly for the construction sector, there is now evidence that infrastructure spending is to be the key priority.
The autumn statement provided the most solid evidence of this, raising the amount the government spends on infrastructure from 0.8 per cent of GDP to between one and 1.2 per cent. In real terms, this means billions of pounds and several major undertakings, as well as numerous minor ones.
It is a signal for construction firms to ensure their operations are well organised for a government-sponsored boom in infrastructure projects. Back offices could be about to experience a major increase in orders, recruitment and deals with subcontractors.
Moreover, the need for construction firms to be flexible to deal with those whose culture and working practices are not the same as those commonly found in the UK could increase significantly. While doomsayers have been warning that Brexit will mean a drop on overseas investment, recent negotiations between the UK and China have seen new commitments from Beijing, and Chinese firms intending to go on investing in the UK, not least in infrastructure.
The nuclear power plant at Hinckley is one such case, but there are many others, from the mixed-use regeneration of Middlewood Locks in Salford to the announcement this week that the China National Building Material Company will be building six factories to make flat-pack modular homes on behalf of a housing association in Warrington.
Above all, however, it is the government that is determined to ensure more investment in infrastructure, with the recently-published pipeline of projects showing over £500 million worth of jobs on the way.
There is a clear rationale behind the government’s thinking. This is not simply a Keynesian move to spend some cash to create jobs, but an investment in greater efficiency and productivity. In particular, good infrastructure may be a key attraction for overseas investors, some of whom will be unsure of the value of establishing factories and offices in a post-Brexit Britain.
All this means that while Brexit may mean lots of uncertainty across the economy, for the time being at least the construction sector is set to become very busy. That means plenty of jobs and opportunity, but it also means that back offices will have a lot to do and those with the right construction management software will be best placed to succeed.