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16 January 2019
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Brexit and the EU © iStock

27 November 2017 | Herpreet Kaur Grewal

The Brexit negotiation process has sparked “a return of nervousness in the construction industry” although the commercial sector is presenting “more opportunities than any other sector”, according to market research by global property and construction consultancy Gleeds.

Its research presents a “nervous and uncertain” market at present.  With increasing political uncertainty, the optimism reported on in the first half of 2017 has waned slightly over the past six months.

Almost half (42 per cent) of industry contacts believe that there has been some decrease in construction activity following the start of the Brexit process, with a quarter (24 per cent) preparing for conditions to decline further over the coming 12 months.  

According to 66 per cent of Gleeds’ contacts stated that “uncertainty around the eventual shape of the Brexit deal is having a negative impact on the construction industry at present”.

However, the research stated that the commercial sector continues to present more opportunities than any other sector - although the proportion of respondents active in this sector has come down slightly from a peak of 94 per cent earlier in the year. 

The residential sector still appears to be benefiting from renewed investment amongst foreign buyers who are attracted by the UK market’s relative affordability following the weakening of the Pound, according to Gleeds.  

These figures “may suggest a changing appetite for construction in the wake of the political uncertainty brought on by Brexit and the General Election. However, the increase seen in the public services sector implies that investment may be being channelled into construction to bolster activity and support the industry during this period of hesitancy”.

Analysts at Gleeds concluded: “The pessimism around the UK’s departure from the EU has intensified considerably over the course of 2017, with 80% of our contacts cautious of negative effects on construction moving forward.”