Hard Brexit could cost 215,000 construction workers, consultancy warns

by: Carmen Reichman
  • 01/12/2016
  • 0
Hard Brexit could cost 215,000 construction workers, consultancy warns
A British exit from the EU single market - also dubbed ‘hard’ Brexit - could cost the construction sector 215,000 workers from other European countries, a consultancy has warned.

Even under the terms of a ‘soft’ Brexit, whereby Britain leaves the EU but continues to accept its legislation on the free movement of people, the industry could miss out on about 135,000 workers by 2020, the firm said.

According to Arcadis, under a controlled migration system, EU nationals leaving the industry will not be able to be replaced at the same rate by new EU workers, meaning the workforce would fall at the rate of attrition.

Meanwhile, in a softer scenario where quotas are introduced or policies implemented on a sector-by-sector basis allowing for a degree of EU migration into the sector, Arcadis still estimates far fewer workers would relocate to British construction.

It warned the shortage of workers would hit the industry at a time when it is already facing a skills gap and threatened to delay the construction of much needed homes and transport networks.

Director of workforce planning James Bryce said: “What started as a skills gap could soon become a skills gulf. The British construction sector has been built on overseas labour for generations, and restrictions of any sort – be it hard or soft Brexit – will hit the industry.

“Missing out on over 200,000 people entering the workforce could mean rising costs for business, and much needed homes and transport networks being delayed.”

Earlier this month, professional body the Society of Mortgage Professionals (SMP) also warned of a “shortage of vital labour” in the house-building market post-Brexit.

The organisation estimated as many as 12% of UK construction workers came from other EU countries.

Meanwhile, the Federation of Master Builders claimed almost two thirds of smaller builders were struggling to find bricklayers and more than half were finding it hard to source enough carpenters and joiners.

Drop in homegrown workforce

Bryce blamed what he called a “massive push towards tertiary education” for the drop in the number of British people with the specific skills the construction sector needs.

“If we cannot import the right people, we will need to quickly ramp up training and change the way we build,” he said.

He called on the industry to turn its attention to robotics and off-site manufacturing as well as better training in schools. In the short-term retraining and turning to the unemployed and underemployed could also be a “significant benefit”, he said.

Indeed, new training facilities have already been brought to market. Online lender LendInvest, for instance, launched a property development training course in November, and was forced to add an extra course after its event was eight times oversubscribed.

Margin-sensitive industry

The problem with construction, Bryce said, was it was a margin-sensitive industry, which could not afford steep hikes in labour costs.

“Controlling post-Brexit labour and resource costs will prove critical if we are to ensure housebuilding and infrastructure projects remain viable,” he said.

However, he warned regardless of the outcome of the Brexit negotiations, restricting EU migration to the UK would “add significantly” to the administrative burden associated with satisfying visa requirements.

“This will both slow the recruitment process and increase costs for construction employers, potentially seeing further lags in building the homes and infrastructure the UK needs,” he said.

Arcadis based its calculations on an assumed 2016 infrastructure and housebuilding workforce of 1.5 million and a counter scenario, which assumes the Brexit referendum never happened. Research for the report was conducted by the Centre for Economics and Business Research.

There are 0 Comment(s)

You may also be interested in

Bridging

Keep up-to-date with all the breaking bridging and short-term lending news and analysis, from regulatory changes to product innovation and inside market knowledge. Take a look at our broker and lender case studies showing short-term finance in practice.

Commercial

Find all the news, opinion and analysis for property finance brokers specialising in commercial and semi-commercial mortgages, alternative and development finance for commercial investments in residential projects.

Second charge

Stay up-to-date with the latest news, analysis and opinion on the secured loan market as it evolves into a mainstream finance option following European regulation on 21 March 2016.

Complex buy-to-let

Whether it’s a complicated asset or a complex customer, you’ll find out all the breaking buy-to-let news in this section. From limited companies to portfolio landlords, student lets to a House in Multiple Occupation, we’ve got all bases covered with our up-to-the-minute news, analysis and opinion.

Mortgage Solutions

Find all the breaking news, analysis and industry comment on Specialist Lending Solutions' sister site, Mortgage Solutions