Uncertainty looms for construction industry under no deal Brexit 

28 October 2020

The impact of a potential no deal Brexit will bring far-reaching repercussions for the construction sector.

Members of the Construction Leadership Council’s Brexit Movement of Building Products and Materials Group have warned that tariffs, border controls and disruption to the supply chain will impact an industry already balancing the challenges of Covid-19. 

John Newcomb, Co-Chair of the Group and Chief Executive of the Builders Merchants Federation, said: “We need a deal with the EU. 

“Without it, the impact of large-scale price increases across the industry and other issues will present a big blow to the UK economy.

“Our worry is if we have no deal and then go to World Trade Organisation tariffs, we will definitely get significant price increases across this multi-billion-pound sector.”

Peter Caplehorn, fellow Co-Chair of the CLC’s Brexit Movement of Building Products and Materials Group and CEO of the Construction Products Association, said: “In addition to the potential for increased prices the sector is concerned that a no deal will result in further uncertainty over the availability of components, materials, and significant commodity’s. 

“Clearly our members will do everything they can to mitigate these issues but without a deal we will be confronted with some difficult situations just at a time where the industry has robustly responded to the challenges of the pandemic while keeping those employed safe and contributing to the much needed economic recovery. 

“Every effort should be made to ensure a deal is delivered.”

Fears of an impact on prices are echoed by Tom Reynolds, CEO of the Bathroom Manufacturers Association. He said: “Looking ahead new customs procedures will incur significant additional costs on businesses, not all of which can be absorbed.

“A significant proportion of bathroom products come from the EU, so new tariffs, possibly ranging from two to 12 percent will, in most cases, need to be passed through into price rises.”

According to Brian Berry, Chief Executive of the Federation of Master Builders, Covid-19 has already affected confidence in the trade, and Brexit uncertainty risks adding to this.

Mr Berry said: “Across several regions, the feedback we have received is that ongoing uncertainty and price increases are having a real impact on builders’ ability to plan for jobs.

“They are struggling to reliably cost jobs and quote for work because they don’t know what the cost of materials will be from one week to the next.”

Concerns about the future are also evident in the supply chain among manufacturers and merchants. 

Andy Williamson, Commercial Director at SIG UK, said: “Most of the feedback we are receiving is around a no deal situation, rather than a deal, which could mean working under WTO rules in a number of areas and this is where possible price increases are coming.”

And Ian McConville, Group Procurement Director, of MKM Building Supplies, added: “We are seeing no evidence of material prices at the moment due to Brexit.

“However, we have seen notifications of potential increases dependent on WTO tariffs being applied.”