Blog: Transparency and collaboration essential for Scotland’s post-Brexit property and construction sector
By James Andersen, a senior audit manager at Grant Thornton in Scotland
We may be four months on from the EU referendum, but the debate over the future of the country’s economy and our wider place in the world is raging on.
Ahead of the vote in June, Grant Thornton’s own research indicated a majority of businesses favoured remaining within the European Union. The overwhelming sense was that stability and ease of doing business across borders were preferential to uncertainty and potential barriers to international trade.
Scotland’s property and construction sector was no different. An industry that endured a fragile post-2009 recovery was in no mood for more setbacks. However, some voices within the sector were far more supportive of cutting ties, citing the apparent inability throughout Europe to tackle the continent’s economic stagnation, which is often linked to increased bureaucracy and centralisation of political and economic power to Brussels.
Now, with the decision made, the arguments have shifted towards the actions of our own governments, in Westminster and Holyrood, and what they can do to deliver what the electorate called for, while minimising potentially profound economic damage.
The property and construction sector continues to play a major role in the Scottish economy, contributing billions of pounds to the treasury and employing tens of thousands of people both directly and indirectly. The actions it takes over the coming months in anticipation of change or in response to any major political decisions, could have far reaching consequences.
There is no doubt that cutting red tape and embracing a more innovative, dynamic approach to doing business is potentially game-changing for an industry that is often held back by burdensome regulation. But, there is no avoiding some of the significant challenges that lie ahead.
Freedom of movement and goods has radically changed Scotland’s property and construction industry in recent years. Companies have been able to plug significant labour shortages with skilled workers from across the continent, while access to raw materials and products has become far easier without the burden of high tariffs and taxes. A fluctuating pound and more complex visa arrangements mean that workforce shortages and increased import costs are almost inevitable, squeezing already tight margins still further. There is already evidence of fears in this field, with some larger scale private projects on hold as investors pause to reflect on the scale of Brexit’s potential impact.
Much of what we’re witnessing right now is a natural response to significant change. The business community – by its very nature – worries about rapid political and economic shifts, but there is sign that the resilience which has helped carry the property and construction sector through previous tough times, is present in post-referendum Scotland. A recent survey by the Scottish Property Federation found that confidence in the industry hit a three-year low immediately after June’s vote, but was already showing signs of recovery.
In the coming weeks, months and years, it’s essential that the political decision makers who have been tasked with overseeing Brexit, are as transparent as possible, providing information and updates that empower and reassure a nervous property and construction sector. By working together and collaborating, we can ensure that Scotland’s economy continues to flourish, regardless of the challenges that lie ahead.