‘Hard’ Brexit could jeopardise 43,000 jobs, economists warn

Building materials would also become more expensive without a trade deal

CIBSE Journal February 2018 Brexit cost of materials

Economists commissioned by the Mayor of London have warned that 43,000 construction jobs will be lost if the UK leaves the European Union without a favourable trade deal next year.

Cambridge Econometrics suggested the industry’s skills shortage would become more acute in the event of a ‘hard’ Brexit that did not allow for freedom of movement. It said that almost 13% of UK-based construction workers were born abroad, while in London and the South East that proportion was as high as 50%.

If the industry does not have access to this pool of workers, wages would be expected to rise, along with labour-supply contracts, pushing up the overall cost of projects. This could have a detrimental effect on the government’s ability to deliver its ambitious new housing targets.

As much as 64% of building materials are imported from the EU and these would become more expensive if there is no trade deal in place post-Brexit, the analysts said. The industry might also lose access to the European Investment Bank and the European Investment Fund, which together put ¤7.8bn (£6.8bn) into major infrastructure projects, and lent ¤666m (£582m) to SMEs in 2015.

The economists, also calculated a potential drop of ¤852m (£744m) in foreign investment in the sector by 2030.