How has Brexit affected the Construction industry?
At the end of last year, on 24 December 2020, a post-Brexit trade agreement had ultimately been agreed by the EU and the UK, this was known as the Trade and Cooperation Agreement (TCA), which had thereby come into effect on 1 January 2021.
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Whilst 2020 had been a tough year for many businesses, with small to medium-sized enterprises and organisations taking the hardest hit. The Covid-19 pandemic had also obstructed major economic investment in a number of sectors, and hence caused substantial supply chain disruption. Luckily however that was not the end of the situation.
The Construction sector was arguably more fortunate than other sectors in that they only had to down tools when the country was initially lockdown in March 2020 last year. Therefore, precautionary measures were put in place, alongside increased costs and investments to facilitate and adhere to government guidelines. These restrictions were essential to make certain that project sites and construction workers could operate in a Covid-safe manner. Moreover, due to the nature of the industry, the economic damage inflicted was minor in comparison sectors such as transport and hospitality.
What is the TCA?
The TCA is the new agreement put in place to introduce a number of measures and strategies to ease and facilitate the flow of trade goods between the UK and the EU, this also applies to construction materials and hardware. Furthermore, to allow for a more thorough analysis of the construction industry as a whole in the UK and how workflow could be improved. The benefits of this can be seen over the past few months as a steady increase in construction projects have been proposed and agreed upon in the UK in favour of small to medium sized construction firms.
That being said, a large factor to be considered regarding the TCA is the likely slowing of progress for particular construction projects and companies. This is due to the implementation of more conformity assessments; customs checks and restrictions on materials and hardware being imported from outside of the UK or the EU. This could result in additional costs for select parties in the construction industry when forming their supply chains.
In truth we have yet to see the full effects of Brexit, be it either post lockdown or in a long term setting, several years down the line. Whilst we may potentially be somewhat hindered by increased red tape when sourcing goods and materials from abroad, this reset moment for the UK could also mean that long standing issues such as low productivity, low living wages and inequality could be properly addressed if handled correctly. The determining factors are ultimately dependent on how this new found independency is upheld.
Further information Sources
RICS Support information
Commonwealth Games and the Construction behind it