The Association for
Consultancy and Engineering (ACE), Build UK, the Civil Engineering Contractors
Association (CECA) the Construction Products Association (CPA) and the
Federation of Master Builders have sent an open letter to Prime Minister Boris
Johnson on the UK construction industry’s preparations for Brexit and the
potential impact of a ‘No Deal’.
The organisations
respectively represent engineering consultants, clients, major & specialist
contractors, civil engineering companies, construction product manufacturers
and suppliers, and SME builders.
Together, they
account for hundreds of thousands of jobs and the majority of the UK
construction industry’s £163 billion in annual turnover. This industry is
relied upon by Government and society to provide and maintain our
infrastructure, homes and wider built environment.
"We have
endeavoured to support and inform Government policy as preparations for Brexit
have developed," the letter to the PM states. "We have also sustained
an essential role with our members and the wider industry by sharing much
needed expertise and information to help prepare for any eventuality.
"Crucially, our
position underpinning this work has been consistent: while we recognise and
respect the referendum result, we believe the UK must leave the EU in a
considered, managed way in order to avoid the likelihood of massive short-term
disorder and potentially long-lasting damage.
"Even now, the
continuing inability of policy-makers to agree a way forward has left our
members – multinationals and SMEs alike – struggling to overcome the market
uncertainty impacting their businesses. Data from the ONS and Markit/CIPS make
clear the worsening erosion in recent construction activity; contracts for new
major offices projects, for example, have fallen sharply since the EU
Referendum due to concerns from investors over long-term economic prospects and
returns.
"This comes
whilst our members seek to properly prepare for an unknown future after October
31st. As in other sectors, they are
spending time and resources on stockpiling; transportation and logistics
alternatives; auditing and guaranteeing the resilience of their supply chains;
and vetting contractual risks and obligations.
"Our forecasts
show that with a deal in place and a smooth Brexit, construction output would
rise by over £1.2 billion by the end of 2020. Leaving in an unplanned way with
a No Deal Brexit however could lead to a fall of £10.5 billion over the same period,
with the greatest impacts felt on the house building and commercial
sectors.
"The immediate
effect of leaving without a deal in place is not knowing the cost of the
materials and goods that construction projects rely on, or if they will arrive
on sites across the four nations to keep projects of all shapes and sizes on
track. Delays in completing building and infrastructure projects impacts our
lives in so many ways; it may be the new hospital in a community which will
speed up lifesaving treatments, the homes desperately required, urgent
maintenance to our heritage buildings or vital repairs to bridges and roads
that will keep Britain moving.
"With the
impact of the previous financial crisis not forgotten in an industry that
experienced countless business failures, plant closings and nearly half a
million job losses, the resilience of our industry has its limits. We
trust that the Government and parliamentarians will agree the arrangements for
trading with the EU as a matter of urgency. In the meantime, we are ready to
reaffirm our willingness to work with you and your new administration, and
would welcome an opportunity to discuss how we can make a success of the years
ahead."
