15th April 2016 Journal Column

Web-LogoBy Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

The looming EU referendum is already affecting the industry, despite a decision not having been made yet, and it’s only going to get worse as the referendum vote draws closer.

The government have claimed that major announcements and new pieces of legislation have been put on hold until the summer, until the decision about the EU has been made. And because nobody knows what’s around the corner, numerous contractors and subcontractor orders have been put on hold in our industry.

Smaller firms, that struggled to survive the recession, will be hit hard whatever the outcome of the vote, with experts warning that it could take a year for the industry’s workload to recover. A year is a long time to wait for work to pick back up, especially when they are only just getting over the impact the recession.

What we don’t want to happen, is for the industry to start falling behind and get off to a slow start, regardless of the outcome. We need work to carry on as normal, particularly in the housing sector, with the government’s plans for 2020 quickly creeping up on us.

What’s happening is almost a repeat of what happened during the Scottish independence poll. In the months leading up to it, the number of projects being granted planning approval fell by £234m compared to the year before.

We’ve already seen examples of the industry going this way leading up to the referendum, with the Markit results, mentioned in previous weeks, showing that the industry is growing at its slowest pace in two years.

The unpredictability of what’s to come means people are cautious and unable to make final decisions. New projects aren’t being started and companies are finding it hard to get financial backing. I understand the fear of the unknown, but the industry still needs to carry on, jobs need doing and people still need to work.

BBC research shows that business support for EU membership decreases with the size of the business. Of those with over 250 employees, 74.7 per cent are in favour of staying in the EU, but for smaller businesses, it’s only 60 per cent. Small businesses haven’t been happy with EU regulation for a long time, but unfortunately it’s smaller businesses that will be hit hardest should we leave the EU and they need to prepare for that.

Luckily the industry is in a much stronger position than it was a few years ago, and had the referendum took place then, the effects on the industry would have been catastrophic. Regardless of the outcome, I think we have the power to bounce back, maybe not as quickly as we may have liked, but I’m confident things will work out in the end.