For the last nine months Brexit has either been a dirty word or an exciting exclamation, depending on your point of view - and possibly, in which industry you work. Now that Teresa May has announced that Article 50 will be invoked on 29 March 2017, we will enter up to a two year period of negotiations and no doubt, some panic moves.
The construction industry is already concerned about the impact of Brexit agreements, especially if we lose access to the single market. The reason is simple, 8% of the workforce comes from EU countries. That's a whopping 176,500 manpower loss, which will have a monumental impact on an industry which is already stretched far beyond capacity.
We are already seeing an ongoing shortage of skilled professionals in the construction industry i.e. quantity surveyors, estimators, which will only be exacerbated in this event.
Back in the Autumn Statement, Hammond announced a £23bn National Productivity Investment to fund housing, R&D and economic infrastructure of which 3.5bn will go to housing and 3bn to infrastructure. Plus, an annual investment commitment economic structure.
This sounded like good news for the industry but already the Office for Budget Responsibility (OBR) suggests that the actual spending will fall short of the £23bn by as much as 15bn. Historically, allocated budgets are seldom redeemed in full!
Meanwhile, the updates predicted for the economy by the OBR showed some positive outcomes for predicted GDP, but overall many downgrades on economic growth generally and in the value of sterling. Forecasts for inflation are also up from 1.6% to 2.3% in 2017 with the OBR's inflation target of 2% not being met until 2020 if predictions are to be believed.
Earnings and the Job Market
It's not looking hot for earnings or employment either as both are predicted to be lower than previously suggested.
- Wage growth in 2017 are forecast at 2.4% - a far cry from the predicted 3.6% in the March 2016 Budget
- Unemployment is expected to rise this year to 5.2% (up from 5%), rising to 5.5% in 2018
There are certainly suggestions that the OBR for one, expects Brexit to level some upheaval to the economy for at least the next two years. Whether these are short-term or longer lasting, only time will tell.
The Current Market
While the road ahead may be bumpy, all is not doom and gloom as we currently still have plenty of vacancies to fill. Skill shortages aside, take a look at the opportunities for quantity surveyors, estimators, project managers and engineers and get in touch if you have these skill sets.
There are plenty of positions available. So, make sure you're in with a chance, and get a copy of your up-to-date CV to us and keep an eye on our jobs pages.
Director - Hong Kong & UK Construction Recruitment Specialist