There has been an eery silence in the air since Brexit was officially executed and the UK left the European Union on January 31st. The word ‘uncertainty’ has been thrown about on the media and during talks between politicians. As discussed in a previous blog by ourselves, there are a few main concerns that keep cropping up for the construction industry.
Currency and Border Counties
Fluctuations in the rate can massively impact material costs. Nevertheless, the current euro rate is good for ROI residents buying materials in NI. Some past clients that we have completed reports for along the border counties, were able to take advantage of this and purchased their materials wherever it was more cost effective! Having the best of both worlds.
However, many firms that have cross border offices will potentially run into restrictions on the movement of plant, machinery and materials which will have an impact on the cost to the client.
64% of materials are currently imported from Europe. Last year, hauliers and truck drivers faced long waits at Calais and Belgium customs points due to Brexit. Extra checks were imposed, and this was long before Brexit even happened. So, we predict this will get even worse in 2020.
The realisation is that unfortunately Brexit is a big unknown. 42% of construction companies say that Brexit will have a declining impact on their businesses in the year ahead. 37% of those companies have no experience dealing with customs. And a whopping 72% have not undertaken any Brexit planning yet. With no preparation or plans in place, contractors and subcontractors will suffer costs which may impact their competitiveness when tendering.
What will 2020 will bring?
For the first two months of 2020 we have already seen hikes in labour rates when we are doing costings for Self-Build clients. This is something to be particularly aware of when at the design and planning stages. Architects also take note, costs are on the rise!
Advice for both self-builders and contractors going forward this year is to ensure you have a separate ‘Brexit’ contingency aside for hikes in material and labour prices.