Recent research by Eque2 which explored the biggest concerns amongst senior finance professionals at construction firms showed that Brexit is surprisingly low on the list. It is not that nobody is giving it any thought, but with only nine per cent raising it, it seems that, at the very least, the prospect of Britain leaving the European Union is not quite as frightening as some have claimed.
Of course, there may be many reasons for this, not least the fact that pro-remain politicians have changed their tune from apocalyptic warnings to a pragmatic determination to make the best of the situation. Indeed, prime minister Theresa May is a case in point. Having campaigned for a remain vote, she has pledged to “make a success” of Brexit.
In addition, the simple fact that there has been a significant delay in triggering Article 50, plus the prospect of two more years of EU membership while the exit terms are negotiated, means the construction industry does have an opportunity to make adjustments and plan ahead. This is particularly the case now we know a ‘hard’ Brexit is in prospect.
Now is a time when firms can take stock and examine what they can do to get ready. For many, investment in new construction management software packages to better manage their finances and staff will be a key way of dealing with the brave new world that Brexit will bring.
Labour issues are undoubtedly going to be an area of focus for construction. A hard Brexit means leaving the single market with its freedom of movement, which has obvious implications for hiring, particularly if new immigration rules restrict the ability of European construction workers to take jobs in the UK.
Proponents of lower immigration will argue that this will force firms to invest more in training and employing British staff. But it could take a long time to do this, not least in parts of the construction sector that are likely to be in big demand, such as civil engineering firms dealing with major projects like Hinckley and HS2. It will also be an issue for the housing sector as the government pushes towards a revised target of 250,000 new homes a year in England.
As an example, a report by London mayor Sadiq Khan this week has noted that 95,000 construction workers in London – over a quarter of the 350,000-strong construction workforce – are from the EU. Mr Khan warned that if these workers are lost, this would “have a crippling effect on our plans to build the homes Londoners so desperately need.”
If labour shortages do arise from restrictive immigration policies, a high priority will need to be placed on managing subcontractor’s relationships by ensuring they are paid swiftly and kept sweet. It’s also important that good staff are retained, training is well co-ordinated and – if skill shortages lead to more wage inflation – that financial efficiency is maintained to prevent the payroll costs becoming unsustainable. This is where investing in construction software packages that increase efficiency, improve communication and enhance cash flow will provide a great return on investment.
Indeed, now may be the calm before the storm. If there were initial reactions of panic and horror on the morning of June 24th, now is the time for careful consideration of how a firm can draw up a strategy and invest wisely to stay ahead of the game. That way, the challenges of Brexit may be met far more comfortably than many will have feared.
For information on how modern construction software from Eque2 can help you prepare your business for the future, please contact us to speak to one of our construction experts.