By now we have all heard about the rather notable slump that Construction has undergone as a result of the uncertainty surrounding the Brexit referendum, with statistics showing that the industry experienced a downturn during June 2016. Most alarmingly, the period running up to the referendum saw the Market Cips construction purchasing managers’ index (PMI) drop to 46, its lowest position since April 2013. For those who are unaware of the PMI, any number below 50 represents a contraction in the industry. However, it’s not all doom and gloom. Despite the fact that the UK’s future is still clouded with some level of uncertainty following the decision to exit the European Union (EU), Arcadis, which is a consultancy company serving the industry, has decided to run contrary to the popular opinion about the direction Construction may take, stating that they believe that a boom period is in the offing following the Brexit. The company’s experts point to the falling pound as a positive sign for the industry, claiming that it will lead to an influx of foreign investment due to lower costs. Assuming the commitment from the government to the industry remains steadfast, the company claims, this increased competitiveness from international investors will eventually lead to more work being available.Arcadis’ Head of Commercial Development, Mark Cleverly, commented: “The market volatility we’ve seen as a result of the Brexit vote is, perhaps ironically, going to re-open the luxury property market to overseas investors, as several of our clients have already reported a bounce in enquiries following the referendum.
“This influx of investment coming into the UK could boost British construction again in the future as well as giving a shot in the arm to the Treasury through increasing stamp duty receipts.
“For a market that, in some areas, has been stuttering for some time due to ongoing stamp duty hikes taking the steam out of buyer demand, the buying opportunity presented by recent events could be a big plus.
“More buyers means a more buoyant market which can only be good news for the industry.”
It is an ambitious statement, especially considering what is happening throughout all UK industry following the Brexit, but it certainly paints a rosier picture for Construction than much of the doom and gloom that is being predicted in other areas.
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C-Link – Optimism In Uncertain Times