Do we know any more about the UK’s Brexit negotiation strategy than we did a week ago?
Hard Brexit, soft Brexit, and now even creme brulee Brexit (hard on top but soft on the bottom, apparently), the UK’s negotiations continue to feel far from coherent, despite the government’s efforts to clarify its position on several issues this week.
Give the current state of affairs, the construction industry can be forgiven for thinking, ‘How will all this actually impact our business?’
Helpfully, a new forecast from Euroconstruct give us some inkling of what’s round the corner for both the domestic market and our European peers.
Second place changes hands
First, the big headline: revisions mean France will replace the UK as Europe’s second-largest construction market by the end of this year.
The forecast predicts total UK construction output of €211.47bn in 2017, compared with €215.78bn in France. That’s a significant change from the last set of Euroconstruct figures in January, which pointed to the UK maintaining second place behind Germany through to 2019.
However, before alarm bells start ringing, these changes are not the result of forecasters expecting a crash in the UK construction market. In fact, the UK’s figures have been revised upwards since January, with France’s leap into second place largely based on a better-than-expected performance from our Gallic neighbours, rather than a major dip in the UK.
“An upwards revision to these particular forecasts and three years of predicted growth in the construction industry doesn’t suggest a Brexit-related disaster”
France’s housing market has been boosted by government stimulus and recovering demand in the first half of the year, while private investment has begun to return, leading to a faster-than-expected increase in civil engineering works across the Channel.
Compared with January’s figures, the UK’s performance looks positive: previous forecasts of a 0.2 per cent decline in 2017 and 2018 have been revised up to 1.3 per cent for both years.
But it’s also important to remember where we are compared to the pre-recession market. Germany, Europe’s largest construction market, is only expected to grow by 0.4 per cent next year, but is also one of only three European countries, alongside Belgium and Finland, where output was higher in 2016 than it was in 2008.
The UK’s output is still down 7 per cent on its pre-recession high, just behind Austria (down 6 per cent) – though this still places the UK within the top five European countries in terms of recovery from the 2008 crash.
In that context, an upwards revision to these particular forecasts and three years of predicted growth in the construction industry doesn’t suggest a Brexit-related disaster.
The forecasts point to a strong housing market, and although non-residential construction is only expected to see “modest growth”, civil engineering activity is expected to pick up from 2018 onwards, driven by the transport and energy sectors.
So while negotiations in Brussels continue, for now the figures point to business as usual for the UK.