Architecural Wallsz are very supportive of British business, and in just less than a week, the eyes of Europe will be firmly set on Britain, as millions of UK citizens head to the polls in their droves. The seismic EU Referendum, which on Thursday 23rd June will decide whether the UK remains in or leaves the union of 28 countries, is the largest political event of a generation. And right now, predication polls are giving very little away.
No one can deny that the argument has been fierce and opinions are deeply divided. So far, politicians have delivered voters with impassioned predications of causalities and worst-case-scenario forecasts, whilst businesses and industry have also waded in on the debate. But, regardless of how we decide to vote and the reasons behind our choice to either stay or leave, how many of us have been able to cut through the noise and hear about how our industry of employment will be affected post-referendum?
As Architectural Wallsz are a part of the construction industry, we took particular interest in a study that caught our eye a couple of weeks ago now. The Glenigan ‘2016 EU Membership Referendum: Analysis of the Implications for the UK Construction Industry’ paper laid out key points, and more importantly, focused clearly on how the construction industry will be affected in the event of both a remain and leave vote.
Here, the Architectural Wallsz team have selected the information that we found most salient at Architectural Wallsz. All credit goes to Glenigan for conducting the research. Read on for some short, sharp snippets. (This is by no means a definitive list, and does not intend to persuade any reader toward a certain political belief).
According to the study, in theory, everything would be ‘business as usual’ if we voted to remain within the EU next week. And, after the post-referendum release of political uncertainty which has been overshadowing industry in recent months, the study predicts that investors should be quick to bring stalled or new projects to site. Specifically for the construction sector:
- Private housebuilding, commercial and industrial buildings are the key growth sectors as it stands, and the pre-construction pipelines for these sectors is currently strong.
- Therefore, we would expect a strengthening in private sector projects for the rest of 2016 and going into 2017. Especially since there are predictions of sustained economic growth in general – firm demand should mean projects go ahead!
- UK manufacturers will still have tariff free access to the Single European Market, which accounts for around half of our exports – this is likely to reassure investors according to Glenigans.
- There’s also expected to be rising demand for private housebuilding due to inward migration from EU nationals, low interest rates and government incentives.
A leave vote could have a number of effects. The Glenigan study identifies the most common arguments for a UK departure to be based on greater sovereignty, greater control over inward migration and a reduction in EU regulations which are often held up as being unnecessarily controlling. A recent FMB survey found that 40% of SMEs in the construction industry noted potential legislative freedom as being the biggest possible positive of a leave vote. So, what changes could accompany Brexit?
- Investment could be throw into uncertainty. The initial impact upon construction workloads could intensify the uncertainty seen in recent months. A recent EY survey also reported that 72% of investors cite access to the European Single market as important to the UK’s appeal – although historically, the UK has been successful in attracting foreign investment.
- Longer term, any sustained weakening of Sterling could increase raw material costs. However, longer term implications depend entirely on the post-referendum relationship with the EU and greater benefits could arise.
- Industry wage levels could rise and firms employing workers from the EY would face additional costs, therefore encouraging the employment of British nationals.
- Brexit may allow for greater control of immigration from the EU area. In the event of reduced immigration, house prices could be eased, in particular the demand for private accommodation. The Glenigan study points out that for the construction industry, lesser demand could lead to a slowing in home-building especially in the private sector, where growth currently resides.
The decision you make on 23rd June 2016 is totally your own, but whatever you do, make sure that you use your vote!
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