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‘Hard’ Brexit to see British construction miss out on 215,000 workers

British construction stands to lose out on almost 215,000 workers – the equivalent of the entire population of Luton – from house building and infrastructure in the event of a ‘hard’ Brexit, warns leading design and consultancy firm Arcadis. Even with a ‘soft’ Brexit, the industry stands to miss out on as many as 135,000 workers at a time when the nation’s skills gulf is becoming more acute. 

Research conducted for Arcadis by the Centre for Economics and Business Research, reveals that a potential ‘hard’ Brexit scenario - for instance, extending the points-based system currently in place for non-EU migrants - could see the number of EU construction workers entering the UK 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 Arcadis estimates that 214,000 fewer people from the EU would enter the infrastructure and house building sectors between now and 2020. 

Meanwhile, even in the event of a ‘soft’ Brexit the construction workforce could again see a steady reduction in numbers. Arcadis has estimated a scenario 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. Under this scenario they estimate that approximately 135,000 fewer European nationals would relocate to British construction - a number equivalent to the population of Ipswich. 

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 seeing costs rise and the homes and infrastructure projects currently on the table delayed or even cancelled. Furthermore, with construction such a margin-sensitive industry, controlling post-Brexit labour and resource costs will prove critical if housebuilding and infrastructure projects are to remain viable.

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 seeing further lags in building the homes and infrastructure the UK needs. 

Given the extremely tight timescales in which the industry now needs to adapt, if British construction is to keep its head above water in the short- to medium-term it will need to rapidly modernise and accelerate use of technology and off-site manufacturing to plug the leak. Arcadis is currently looking into the impact of the skills gap on housebuilding and infrastructure in regions across the UK and will publish their findings early next year.

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.

“Be it hard or soft Brexit, we need to take back control of the construction industry. The likes of robotics and off-site manufacturing have never been taken as seriously as they should, but they could well prove the difference. So, too, could training. Working with schools and colleges is one way of taking control but this takes time. In the short term retraining and turning to the unemployed and underemployed could be a significant benefit to an industry under significant pressure.”

Comments

The words "skill shortage " is not really an accurate description of the problem. It is the lack of an easy supply of unskilled labour which may cause problems in the short term . And these consequences, which are primarily of a social nature need to be addressed by the construction industry in a positive manner. This whole article is negative in nature and slanted towards suggesting that the UK will somehow be worse off because of Brexit . This is to totally ignore one of the reasons that many unskilled and semi skilled workers voted to leave the EU to control cheap labour from Europe . And is also to ignore the utter complacency of UK industry to take seriously the need to support training and manpower planning . Brexit should lead to the construction industry being even more efficient and productive .
I concur with Nicholas Finney. James Bryce correctly identifies that we have available home-grown 'underemployed and unemployed' human resources, for which a simple act of retaining could see them contributing positively to the economy and to the Construction Industry.
In Dec 15, said the ONS, the unemployment rate was 5.4%, exactly the same as in Jul 79 when Mrs Thatcher won a landslide victory on a slogan of "Labour isn't working". On top of 1.7 million unemployed, the ONS says 0.9 million are on zero hours contracts; that's 2.6m "unhappy bunnies". With rough sleepers, foodbanks and a YouGov poll in Dec 15 showing that for 63% of people immigration was a top 3 issue, why is there surprise that the majority voted to leave the EU? Any attempt to continue to bring in large numbers of unskilled or semi-skilled EU citizens, will meet with strong resistance from the electorate, which politicians will heed and, in the worst case, could result in civil unrest. The construction industry has to find ways to attract more UK citizens into working for it. Not easy task when it does not have a positive image, least of all amongst women.