Why uncertainty undermines our industry
The uncertainty caused by Brexit shows little sign of diminishing, bringing with it additional risks for construction. But Chris Soffe hopes the challenges faced can lead to change for the better.
It is just a few short weeks since the UK should have “left” the EU. It is now likely to be months until we leave, with the news that the UK and the EU have agreed a “flexible extension” of Brexit until 31 October – which already highlights the theme of this article. We thought we knew the date on which Brexit would happen – the date on which Article 50 would come into force and the UK would no longer be an EU member state – for a little over two years.
Yet what did this mean in practical terms; in business and in our day-to-day lives? It has meant – regardless of which side of the debate you may be on – a lack of certainty about the future rules and regulations under which we trade and travel and a lack of opportunity to do the long-term planning and projecting necessary for success in this industry. And the situation continues…
With an awareness that I may be preaching to the choir, there’s no denying the reality these uncertainties have led to – additional risks in project planning, concerns about labour shortages, fluctuating prices against currency volatility – throughout the supply chain.
To a certain extent, this amplifies the situation for our industry as it’s not just contractors facing this; it’s an ever-moving feast for clients, contractors, developers, and all the others involved in the industry and across every sector.
It’s true that there are statistics which show, in the UK at least, the pattern of construction sector growth or contraction generally mirrors whether or not the economy is in an upturn or a downturn. But even an optimist who believes that our industry may be immune to short-term uncertainties can’t claim that it is completely immune to the vagaries of the economy.
I also have concerns about those who are only now realising that there’s further uncertainty to come. It won’t be done and dusted whenever it is that the UK leaves the EU. That will only be the start of the “transition period”, which is when we’re supposed to get everything in place and prepare for the moment when the new post-Brexit rules between the UK and the EU begin.
So what do we do now? Firstly, I think it would be entirely legitimate to take a moment to think about who will gain from this uncertainty. Are they really serving society and the public good? Is there anything to learn about how we choose to debate and then make these decisions?
Voters now know a lot more about the complexity and ramifications of leaving a trading bloc like the EU than they did at the time of the referendum and the demographic of the UK voters is always changing with new 18-year-old voters coming on stream as the population ages.
Secondly, we need to deal with the practical, day-to-day challenges. We need to be better at recruiting into the industry; we need to pay attention to due diligence, examining all the risks at project level and across the supply chain; we need to keep up-to-date on government advice and changes to legislation.
I have something of an international overview. I started my career in the UK but have worked internationally for most of it. I’ve seen similar uncertainties play out here in the US with the potential for trade wars as a result of the imposition of new tariffs. The plan to reduce the US trade deficit is currently increasing it.
I can see the damage the Brexit process has done and the uncertainty being projected on to the UK industry from outside, not just the disruption at national level. Britain’s brand matters so maintaining a strong global image amongst many unknowns is proving to be a challenge. But maybe the challenges we have faced –and will continue to face – will lead to change for the better.
Chris Soffe is CIOB president and vice-chairman of Gleeds Americas. He will be at the CIOB’s Members’ Forum in Edinburgh in June. Further details can be found at: https://membersforum.ciob.org