A little while ago we looked at the potential impact of Brexit on the engineering sector. With the recent breakthrough in talks, a Brexit deal looks a little closer. But what will our ultimate withdrawal from Europe mean for investments in new projects, for job creation – and indeed for the recruitment industry as a whole.
A survey last month by Ipsos MORI, commissioned by Invest Europe, looked at how Europe has changed as an investment destination, including an examination of the Brexit impact. With a respondent base of investors from France, Germany, UK, USA and China, the survey revealed that countries are split in their propensity to invest in the UK.
With a growing anxiety amongst key European countries that Brexit will impact their commerce, most German and French respondents stated were less likely to invest following Brexit, whilst our departure seemed not to faze the Americans, whose attitude was unchanged. Chinese investors, on the other hand, seem more likely to be interested in spending their money in the UK. Possibly reflecting the potential for new trade relations between the UK and other international markets, 58% of the Chinese companies interviewed said they were more likely to invest in the UK over the next five years.
In the UK, Brexit secretary David Davis has confirmed that the government has not conducted sector-by-sector studies on the impact of leaving the EU. But a quick Google search shows concern expressed across many industrial sectors, and a general feeling of relief on news of the deal.
The Telegraph reports that the construction sector is warning of a ‘cliff edge’ over EU workers. With a massive drive to build 300,000 new homes a year, it’s a sector with high recruitment needs. Around 6% of construction workers are EU migrants – but that rises to 50% in London and the South East. And it is forecast that over the next decade the construction workforce will decrease by up to 25% - fuelled by a combination of a skills shortage thanks to an ageing population, and a decrease in new entrants who are put off by the volatile nature of the industry. The sector is addressing this by recruiting and training more UK workers, but states there “will likely remain an ongoing need for significant levels of skilled EU workers."
The recent news must come as something of a relief for the automotive industry. The Independent reported recently that Ford has warned the Government that failure to secure a final Brexit deal would be a disaster for the UK’s motor sector. Ford has spent 40 years putting together a supply chain taking advantage of the open European market, and a ‘no-deal’ Brexit could cost them $1billion in tariffs. These concerns are echoed by the wider automotive industry with the Society of Motor Manufacturers and Traders saying, “we need to see concrete progress – and quickly.” There’s now a hope that the break-through deal paves the way for positive trade negotiations that negates the need for hard borders.
The Independent Transport Commission think-tank has urged the Government to focus on the aviation industry during its Brexit negotiations. Leaving the EU is likely to have a significant impact on the regulations governing aviation – and there are no historic rules to fall back on should we find ourselves in a ‘no-deal’ situation. There is also a huge knock-on effect to manufacturing, with aircraft parts being made and assembled in many different countries. Minimising regulatory barriers post-Brexit will help to ensure the competitiveness of the UK sector.
And what about the recruitment sector? With the breakthrough deal including the protection of the rights of EU citizens in the UK, it’s a step that has been welcomed by recruiters. Uncertainty is what causes delays in decision making, and raises concerns about job security. This positive move reduces some of that uncertainty around Brexit,
Many in the industry have expressed hope that that news of the deal will slow the flow of EU workers choosing to leave the UK. Since Brexit, there has been concern about access to the pool of EU workers that so many industries rely on heavily. It’s generally seen as good news for UK employers and those looking for work.