How will Brexit affect the construction industry?
June 23rd saw a historic vote by 52% of the British population to leave the European Union. Among the doom and gloom predictions being peddled about, one question still remains: With the construction industry making up around 6% of the economy, what sort of effect will Brexit have?
[ClickPress, Wed Dec 21 2016] A useful way to look at the effect Brexit may have is to look at what happened in the immediate aftermath, in this case from June to October.
June through to September: Construction volumes fell by 1.1% in the third quarter, as a result of large falls in repairs that were only partly offset by increment rises in infrastructure and public building works, according to the Office of National Statistics. The Markit/Cips data for July showed that the Purchasing Managers index (PMI) for the construction industry – a key measure of confidence within this sector - fell to 45.9 in July from 46.0 in June. August saw a slowdown within the construction sector – 1.5% - in August.
September: There appeared to be an improvement in performance – albeit surprisingly – by the construction industry in September. PMI results showed an increase to 52.3 from 49.2 in August.
October: PMI for the construction industry appeared to move up from 52.3 in September to 56.2 in August.
It’s clear that despite the initial shock surrounding the Brexit vote, the construction industry has managed to bounce back somewhat. However with the intricacies of Brexit yet to be thrashed out, it remains to be seen how Brexit will affect the construction industry. Whether we go for a hard Brexit or a soft Brexit, one thing’s for sure: things will never be the same again.
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