Government should raise investment in infrastructure
SCOTLAND’S property and construction sector is experiencing a sense of deja-vu. In 2009, the sector faced its toughest challenge in decades as global economic uncertainty took its toll. Businesses folded, major developments were put on hold and there were widespread job losses. Since then, the industry has worked tirelessly to regain some of that lost ground and learn lessons to insulate itself from future global fluctuations. Growth and a certain amount of stability have returned to the industry, but there are storm clouds forming on the horizon.
No amount of contingency planning and resilience can protect the sector from the potentially seismic challenges created by Britain’s departure from the European Union. The issue was raised at a recent event hosted by the Edinburgh Chamber of Commerce. Representatives from a variety of different industries met with the Department for International Trade to raise concerns and to hear the direction in which the Westminster Government wants to take the country over the coming months and years.
There were some words of reassurance – particularly on the potential for so-called “cliff-edge” scenarios, whereby existing free trade agreements and other arrangements come to an end, with no adequate new deals to replace them. We were told that the team looking after international trade policy has been substantially beefed up with a ten-fold increase in the number of people now working round the clock, focused on ensuring a business-friendly smooth transition. The consensus is that there is still a huge amount of work to be done and gaps to be bridged, however.
Whatever the final outcome, concerns are growing within property and construction circles, and it’s hoped we will get answers sooner rather than later. Access to skilled labour has become one of the main talking points with almost
Brexit will create huge challenges for the property and construction sector
universal agreement that it could pose significant challenges for the sector if free movement of people becomes a future obstacle. Some businesses are already pointing to anecdotal evidence of a reduction in workforce availability, which is driving up prices and driving down construction output. That’s despite productivity being on the rise overall in the UK.
As deal negotiations progress, we’ll start to get a clearer picture of what lies ahead and can plan accordingly. But, action could be taken by political leaders now to promote sustainable, long-term growth and build momentum ahead of potentially damaging future change. Meanwhile, businesses – if they haven’t already done so – should begin the process of scenario planning, factoring in the worst-case possibilities and ensuring that measures are in place to protect people and profits.
One thing is clear: we need to see increased investment in Scotland’s infrastructure. This would have the dual benefit of providing a significant opportunity for the industry to thrive in a sustainable way, while also making Scotland as attractive as possible to foreign investors. A collaborative approach that puts words into action will be key to ensuring a prosperous future in property and construction – and there are some promising signs in this regard, particularly in respect of the Scottish Property Federation’s recent work with the Scottish Government– but also in driving confidence and long-term inward investment in other sectors. Political agreement is important, but ensuring the country is open for business and globally competitive is also key.
Brexit will create huge challenges for the property and construction sector. By taking action now to minimise future risk, we can ensure it remains a key part of Scotland’s vibrant economy.
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