As we stated last week, we will be following up on the pros and cons of the UK leaving the EU.
In this week’s article, we will be discussing the impacts the EU Referendum will have on those within the Construction Industry
The new orders figures within the construction industry decreased for the first time in 3 years in May 2016. This led to a slowdown of the overall growth rate for the construction sector.
Many decision makers are awaiting the result of the EU referendum, which has led to delays in the speed of which decisions being processed, of which analysists did not expect a change.
What will Happen if the UK Leaves the EU?
- Construction firms may have to pay new taxes and customs costs as well as dealing with slower administration processes for conducting business with suppliers based in mainland Europe.
- Construction firms may have difficulty hiring skilled workers from outside the UK to address the skills shortage, and employees who are non-British nationals may be required to obtain visas or work permits in order to keep working in the UK.
- With access to fewer qualified workers, the government may not be able to achieve its goal of building 1 million new homes by 2020 – especially to the quality and standards it desires.
- If the UK leaves the EU, but does not join a European Economic Area (EEA), construction firms would not have the same benefits as other firms in the EU or an EEA when bidding on international projects.
What Happens if the UK Remain in the EU?
- With limited access to qualified workers, there could be an increase in the number of available construction industry apprenticeship programmes.
- Construction firms would potentially have fewer regulations governing how they conduct their operations, which could increase their profits.
- Unburdened by the EU trade rules, the UK could negotiate better trade agreements with non-EU countries.
- Although the UK construction industry has benefitted greatly from the EU funding infrastructure projects, the UK government could potentially save money by self-funding these projects without having to contribute to the EU budget.
We would like to state, our views on the EU referendum are neutral. The opinions and facts are solely bases on the sources stated above. Assessed with an open and fair approach to sharing information on the changes the UK market could potentially witness in the coming weeks.
Like many others, we cannot be certain on the effects remaining or leaving the EU will have on the UK. All we can do is research both sides of the argument and make an informed decision on the 23rd of June, on the true opinions remaining or leaving the EU would have on you and your business directly, indirectly and as a nation. Ensuring a contingency plan is in place regardless of the outcome, enables businesses to continue operating with as little exposure to risk as possible.
Many insurers and brokers are uncertain of the impact Brexit would have on the market, re-evaluating and examining your insurance needs whilst considering the direct impact of the UK’s relationship with the EU will ensure you are prepared for the outcome of the EU referendum.
Next week we will be discussing the pros and cons of Brexit within the insurance industry. If you would like to speak with one of our advisors on the changes and impacts of the EU referendum on your business, feel free to contact us.