Whether this is simply a knee-jerk reaction to economic uncertainty or a sign of things to come for the sector remains to be seen
After a four-day spell in which the UK voted to leave the European Union, the prime minister stepped down, and the shadow cabinet resigned en masse, the phrase “a week’s a long time in politics” looks as suddenly off the pace as England’s footballers in this week’s other, vastly overshadowed, European exit.
The shock of the past few days, triggered by the UK’s 52%-48% vote to leave the EU, has been compounded by the fact that, despite the closeness of pre-referendum polls, few believed a Brexit would actually happen. Equally few are prepared for the consequences. As Building went to press on Tuesday, an internet search for “What now?” was bringing up analysis about Britain leaving the EU as its top result - and even the analysis contained more questions than answers.
At the time of writing, the FTSE 100 had bounced back slightly from its 8% crash last Friday; but markets were anticipating weeks of volatile trading. Developers and housebuilders have been among the companies worst hit. Shares fell on average around 20% following Friday’s result and, despite recovering slightly, remained well down on pre-referendum levels at the start of the week.
Whether this is simply a knee-jerk reaction to economic uncertainty or a sign of things to come for the sector remains to be seen. Building, along with two-thirds of the construction sector, backed the Remain campaign in the belief that the union appeared to offer the best outcome for the sector as a whole - in terms of economic certainty, foreign investment and the free movement of labour. For a sector still recovering from recession, the economic unknowns of leaving appeared too great a risk.
Whether these fears were well founded will greatly depend on the actions taken by the industry’s clients over the coming weeks and months. Questions have been raised over the future of £5.3bn of regeneration initiatives that were due to receive EU funding, while concerns have been voiced that the vote could call a halt to French energy giant EDF’s investment in a new nuclear power station at Hinkley.
However, the reality is that the initial impact of Brexit on the ground for the industry will not become clear for some time. What businesses will need to do over the coming days, amid the rush to understand the longer-term implications of the vote, is at least push for visibility on those projects that have been on the go-slow in the run-up to the referendum.
The wider economic picture will not emerge for months, and not fully for years. But when it comes to the long-term outlook, one thing is certain. Whatever the ultimate impact of a Brexit - good or bad - the UK and its new prime minister will still need delivery of vast amounts of housing, infrastructure and commercial work over the decades to come. That, from a business perspective, should offer the industry some reassurance. But it’s also crucially important when you think about the type of society that will be created following the decision to leave the union.
Because whatever your view on the referendum result, one aspect of the immediate aftermath that should be universally condemned is the division that it has fuelled in our communities. Not between Leave and Remain supporters, but from those who have seen the Leave campaign’s victory as a reason to turn on those in our society who are often already marginalised - as a result of their nationality, religion, or ethnicity.
Whatever else happens as the impact of the vote emerges, the industry has an important part to play in countering this sad, destructive trend by creating communities that break down barriers between social groups rather than play into the hands of those who seek to provoke discord.
This industry has created some wonderful, inspirational places over recent years, many in areas that frankly haven’t had much to inspire them. And whatever happens in the economy, the prospect for future generations will be vastly better if that work continues.
Even if the complex questions over the funding and skills that the sector will require to carry it out are only just beginning.
Sarah Richardson, editor