Brexit, supply shortages and energy price hikes – will it affect the building industry?

There have been many questions surrounding whether Brexit would affect the building industry, with concerns over skills shortages, the import and export of materials, and new regulations and standards.

The implications of a labour shortage are already beginning to be felt, with labour demands outstripping supply, which in turn leads to higher costs for projects. This could have a knock-on effect on the housing market and the current crisis surrounding it. 

Before Brexit, it was estimated that 64% of building materials were imported from the EU; now, duties and limits on quantities have led to a supply shortage. 

The government has placed an emphasis on “UK firms and materials only” to combat the shortages that are being experienced, and are negotiating and developing its own trade agreements with the UK and further afield, including China and the US. 

This year has also seen a hike in energy prices, caused by economic recovery from the pandemic, a shortage of supplies and increasing efforts to reduce the use of fossil fuels.

To account for this price increase, building materials have become more expensive. Steel is set to be heavily affected by this, as it is one of the most energy intensive industries. A similar impact is forecasted for glass and cement production. 

Contractors should therefore expect delays, and prepare for the potential impact of the crisis on contracts. 

There should also be a consideration for net-zero construction, as they will be less affected by any future energy crises, as well as being in a better position to secure contracts and alignment with government projects.