EWS Standard of new homes will fall after EU exit... Boris Johnson recently announced a new fast-track visa system to attract top talent to the UK No deal Brexit would cost 12bn, say industry groups Trade bodies claim market uncertainty affecting businesses A number of industry bodies have joined forces to warn the government that a no deal Brexit would cost the UK economy 12bn. The Association for Consultancy and Engineering (ACE), Build UK, the Construction Products Association, the Civil Engineering Contractors Association and the Federation of Master Builders have written to the Prime Minister, Boris Johnson, to say a smooth Brexit would lead to a rise in construction output of more than 1.2bn by the end of next year. A disorderly departure from the EU, however, could lead to a fall of 10.5bn over the same period, they claim, with the greatest impacts felt on the housebuilding and commercial sectors. The trade bodies state that the continuing inability of policy-makers to agree a way forward has left our members struggling to overcome the market uncertainty impacting their businesses. They quote data from ONS and Markit/CIPS surveys, which make clear the worsening erosion in recent construction activity. The letter continued: The immediate effect of leaving without a deal in place is not knowing the cost of the materials and goods that construction projects rely on, or if they will arrive on sites across the four nations to keep projects of all shapes and sizes on track. With the impact of the previous financial crisis not forgotten in an industry that experienced countless business failures, plant closings and nearly half a million job losses, the resilience of our industry has its limits. We trust that the government and parliamentarians will agree the arrangements for trading with the EU as a matter of urgency. Without a deal costs of materials will be unknown Builders are cutting recruitment and using more sub-contract labour because of the uncertainty caused by Brexit, according to the Federation of Master Builders (FMB), which says this could lead to reputation-damaging mistakes and affect the quality of new housing. In its latest quarterly survey of members, the FMB found a drop in employment for the first time in more than five years, with 21% of companies saying they had laid off staff since the previous quarter. This is despite 27% reporting an increase in business during the same period. The survey also found that housebuilders were encountering problems recruiting skilled workers and the FMB said contractors were less likely to build to the right standard. Years of Brexit uncertainty have resulted in construction bosses starting to change how they employ their workforce, said FMB chief executive Brian Berry. To ensure their firms are ready for any economic shockwaves later this year, employers are reducing their number of direct employees and relying more on sub-contractors, who are easier to shed if work dries up. He added that apprenticeship training had also taken a hit. ...but output grows, says RICS survey Surveyors reported an unexpected rise in construction workloads during the second quarter of the year, as clients decided to shrug off the uncertainty created by Brexit. The latest RICS Construction and Infrastructure Market Survey reported that 16% more surveyors had experienced an increase in construction workloads than had seen a fall despite growing fears of a no deal exit from the EU. After a prolonged period of delays and underinvestment, businesses now appear to be fed up and are proceeding cautiously with new hiring and intentions to invest, said RICS senior economist Jeffrey Matsu. While much of this is likely to be backfilling or maintaining existing capacity, the requirements of larger projects such as Hinkley Point C and HS2 are constraining growth opportunities elsewhere. With the range of possible outcomes related to Brexit as wide as ever, we expect to see continued volatility in the construction output data, but foresee workload activity stabilising. There was modest growth in commercial and public non-housing activity, but the RICS said it expected the private housing and infrastructure sectors to be more resilient over the year, with respectively 27% and 25% rises in surveyors expecting activity to increase rather than fall. It said investment in training and equipment would also improve over the year, as its market confidence indicator which includes workload, employment and profit-margin expectations grew by 21% in quarter two, compared with 13% in the first three months of the year. www.cibsejournal.com September 2019 7 CIBSE Sep19 pp07 News.indd 7 23/08/2019 18:28