“Overcoming Brexit uncertainty – the impact on the Construction and Manufacturing sectors” considers the potential impact of Brexit on the Construction and Manufacturing industries, and proposes a procedure to assess and mitigate the possible impacts.
Understanding possible Brexit outcomes
- In the first section, four potential Brexit scenarios are outlined, gathered from the Bank of England’s and others’ publications.
- Two scenarios are outlined where the UK leaves the EU with a deal: a “close” and a “less close” scenario. Both do not result in major economic impacts over the near term, as the changes are proportionately applied.
- We consider the “less close” scenario a more realistic representation of the UK government’s proposed future relationship.
- Two no-deal scenarios are also proposed: a “disruptive” and a “disorderly” scenario. Both result in significant negative economic impacts resulting from the initial disruption to trade, and include secondary impacts which feed through into lower economic activity.
- Both scenarios show the UK in recession over the three quarters starting in Q4 2019.
Assessing the impact for construction and manufacturing companies
- The impacts on the Construction and Manufacturing industries are then presented. Both short- and long-run impacts of both a deal and a no-deal Brexit are outlined.
- A discussion of the likely impacts of major construction materials and products is provided, with a high-level assessment of the probability and impact for use as a starting point in risk assessment.
Mitigating the Brexit risk
- Finally, a procedure to assess and mitigate the possible impacts for a construction or manufacturing company is presented, including risk analysis and risk mitigation.
- Several suggestions are provided for companies to consider across the range of a company’s activities to mitigate any disruption.