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UK construction must take opportunity to plan now for post-Brexit market

Like the UK itself, the construction market faces a necessary period of transition. The failure of Carillion, release of the Hackitt Review findings and ongoing backdrop of Brexit-related uncertainty are all shaping a new paradigm for the sector. Attitudes to risk are hardening, a lack of capacity continues to hamper deliverability and drive competitive tension, and the need to innovate continues to be paramount. Meanwhile, the post-Brexit trading environment remains unknown, underlining the need for agility and flexibility. The UK construction industry has the opportunity to plan, think about and implement measures now, in order to take full advantage of the post-Brexit marketplace.

Will Waller

Build to Rent Market Leader +44 (0)7787 152 097 Ask me a question
UK Construction market view

Early engagement with the wider supply chain and contingency planning will help manage Brexit related risks in the months ahead

Downside risk to longer term construction demand levels, particularly in some sectors, is likely to temper tender price growth.  Inflationary pressures on input costs, resulting from increased import costs, skills shortages and global commodity price inflation points to continued pressure on margins in the supply chain.  As the trading environment changes, collaboration will continue to be key.

An opportunity for change

The final report of the Hackitt Review, Building a Safer Future, has exposed deep weaknesses in accountability, oversight and enforcement relating to the design, construction and operation of high risk residential buildings. The scale of the Grenfell tragedy gives the Review genuine momentum, creating the expectation that the industry must address shortcomings alongside the development of legislation.  The implementation of the Review’s findings is a vital opportunity for the industry to improve performance and reputation.

The impact of Trump’s steel tariffs

The introduction of steel tariffs could impact the volumes of steel available in any given market.  In the US, it is likely supply will be constrained, driving up costs - at least until more domestic production can come online.  In contrast, markets previously able to export steel competitively to the US before tariffs may be left with more surplus and this could reduce costs in those markets.  
However, the supply and cost impact could still be unpredictable. Those countries left with excess supply could seek to sell into alternative markets and so the demand and supply imbalances around the world may play out in a variety of ways. Time will tell which markets will be most affected and how much of any cost increases or decreases are actually passed through to construction clients in tender prices. 

Download our full Summer Market View below. 

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Will Waller

Build to Rent Market Leader +44 (0)7787 152 097 Ask me a question

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UK Construction market view
Summer Market View 2018

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