Brexit Construction Sector Heading for Brick Wall
independent.co.uk – 30/06/2016
Brexit: UK construction sector heading for ‘brick wall’ as infrastructure projects suspended. Anxious international investors have already pushed the pause button on future UK infrastructure investments since last Friday’s shock result The UK construction industry will slam into a “brick wall” early next year due to the massive uncertainty created by the Brexit vote, an industry source has warned. A person in the sector, who contacted The Independent but did not want to be named, said that since the shock referendum result was announced last Friday morning anxious international investors have already pushed the pause button on future UK infrastructure investments.
“Construction projects that are underway are going to continue. It’s six to seven months down the line where a lot of projects are going on to ice,” said the source. “What you’ll find is the construction industry potentially running into a brick wall.” “There’s a danger of a huge drop off. And if this is the situation for two years [the assumed time for the UK-EU divorce terms to be negotiated] that’s an awful long time for construction companies.” The person said up to £20bn of planned infrastructure investment was at risk and that foreign sovereign wealth funds were among those pulling in their horns.
In another threat to the City, Francois Hollande, the French President, said this week the EU should insist the clearing of euro-denominated trades be done within the bloc. This could compel the London Stock Exchange’s LCH.Clearnet, which clears half of global interest rate swaps, to move out of London. Analysts in Japan have said there is a 75 per cent chance Toyota and Honda could pull operations out of Britain if the country’s motor exports are hit with new EU tariffs. Ford has confirmed it may now cut jobs in the UK. Around 80 per cent of UK manufactured cars are exported, with half going to other EU states. There are fears that UK manufactured cars could face a 10 per cent EU tariff. Read More