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'Hard' Brexit could leave industry short of 215,000 workers

30 November 2016

The British construction industry could lose up to 215,000 workers in housing and infrastructure should a “hard” Brexit occur, construction consultancy Arcadis has warned.

The firm states that a potential hard Brexit scenario, such as extending the points-based system currently in place for non-EU migrants, could result in the number of EU construction workers entering the UK to fall at the rate of attrition. This would mean that those EU nationals leaving the industry cannot be replaced at the same rate by new EU workers.

If this were to play out 214,000 fewer people from the EU, the equivalent to the population of Luton, would enter the infrastructure and house building sectors between now and 2020.

Under a “soft” Brexit, whereby, for instance, rigid quotas are introduced or policies implemented on a sector-by-sector basis, allowing for a degree of EU migration into the sector, Arcadis estimates that approximately 135,000 fewer European nationals would relocate to British construction.

Unlike, for instance, the financial services industry, construction is heavily reliant on unskilled or semi-skilled workers. A points-based system could, therefore, prove problematic in terms of bringing in the required labour from overseas, potentially resulting in rising costs and the homes and infrastructure projects currently on the table delayed or even cancelled.

Furthermore, with construction being such a margin-sensitive industry, controlling post-Brexit labour and resource costs will prove critical if we are to ensure house building and infrastructure projects remain viable.

Net drop in EU migration to British house building and infrastructure industries

(Based on an assumed 2016 house building and infrastructure workforce of 1.5m)

  Hard Brexit
Range Soft Brexit
2017
23,847 5,777
18,071
2018
40,970 14,498 26,472
2019 66,708 25,174
41,534
2020 83,016 33,012
50,004
Total 214,514 78,461 136,081
Source: Arcadis

Regardless of the outcome of the eventual negotiations, restricting EU migration to the UK will 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 resulting in further lags in building the homes and infrastructure the UK needs.

James Bryce, Arcadis director of workforce planning, 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. In recent decades, there has been a massive push towards tertiary education which has seen a big drop in the number of British people with the specific skills we need. If we cannot import the right people, we will need to quickly ramp up training and change the way we build.”

He added: “Be it hard or soft Brexit, we need to take back control of the construction industry. The likes of robotics and offsite manufacturing have never been taken as seriously as they should, but they could well prove the difference.”

The study comes amidst growing concern in the industry about the impact of Brexit on skills. In September a coalition of professional bodies including the CIOB warned Brexit minister David Davis that the UK’s construction skills crisis could severely worsen if the government did not take steps to ensure access to a skilled workforce during its post-referendum negotiations.

The Royal Institution of Chartered Surveyors, the Royal Institute of British Architects, the CIOB and the Royal Town Planning Institute are signatories to the letter to the secretary of state for exiting the European Union.

Comments

Surely the restriction on immigration is not a blanket restriction? The proposal as I see it is that provided the entrant has a skill or profession that is required by the UK and has employment pre-arranged, there will be no likelihood of them being denied entry to the UK. So the statistics created by this report could be considered slightly biased.

Andrew, 30 November 2016

This has been known for decades; the industry has underinvested in training and research for years as it was easier (read: cheaper) to outsource it all to foreign countries by employing foreign workers.
Chickens come home to roost and we've about 2 1/4 years to adapt and address the issues, but I suspect nothing will be done until its far too late, unless UK government actually listens to experts for once.

Scott, 30 November 2016

How pathetic, as mentioned by other commentators, the Industry only has itself to blame, underinvestment in training apprentices to strive for greater profit & ever higher salaries & bonuses for the directors! Also, if foreign workers have a skill they'll be nothing to stop them being employed here. For goodness sake just stop 'Remoaning' & get on with the job, particularly building affordable housing!

Richard Moore, MCIOB, 30 November 2016

The funny thing is the people who voted out are expecting an increase in their salaries in the short term, with restricted labour supply. In actual fact, the medium to long term effects on large construction companies with 1.5% profit margins and £23 billion investment from the government into productivity will lead to rapid investment in automation and mass loss of skilled construction workers. What may have taken 20-30 years to materialise with automation is now likely in 5-10 years. Self immolation at its finest

Alex, 30 November 2016

The numbers produced by Arcadis are pretty meaningless. However we do know that exit from the EU has huge risks and we are dependent on people you wouldn't offer a job to if you were in business to negotiate acceptable severance terms

m. Underwood, 30 November 2016

There should be no unskilled or semiskilled workers on site. The construction industry surely is aware of that regulation

Sheila Anderson, 1 December 2016

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