Builders eye rise in staff costs as UK exits the EU
● Third quarter running of negative sector confidence – SBF
Confidence in the Scottish building sector has fallen, with employers expressing rising concerns about the potential impact of Brexit on labour costs, a new report says.
This is a central finding of the latest Scottish Construction Monitor, a quarterly survey of the membership of the Scottish Building Federation, out today.
Employers from Orkney to the Borders were asked how confident they felt about business prospects over the next 12 months compared with the past year.
In the first quarter of 2018, industry confidence slid three points, dropping from -3 to -6– the third quarter running that sector confidence has been rated negative. A positive overall confidence rating was last recorded in mid- 2017.
A total of 57 per cent of building contractors said they were concerned that the UK leaving the EU is likely to drive up labour costs in Scottish construction over the next five years.
More than a quarter ( 26 per cent) predict that the Brexit process will have no impact on labour costs, while a further 14 per cent were unsure.
Scottish Building Federation MD Vaughan Hart said: “One key impact ( of Brexit) for Scottish construction employers will certainly be the availability of skills and labour from other EU member states – and related to this, future labour costs.
“With only 4 per cent of the workforce coming from other EU member states, the Scottish industry is less directly exposed to this impact than other regions of the UK, particularly London, where around half of the local construction workforce is made up of nonUK EU nationals.”
However, Hart added that the indirect impact on labour costs within the Scottish building industry could be much bigger .“An exodus of EU nationals from London’s construction sector could be a significant drain on the availability of labour and skills here as more Scottish workers relocate to take advantage of job opp or t unities down south,” he said.
“In that context, I think members are rightly concerned that Brexit could drive up labour costs.”