Brexit and the Construction Industry
Amid the uncertainty following the vote to leave the European Union, it is good to see that figures for August 2016 are more positive. The PMI (Purchasing Mangers’ Index) bounced back to 49.2 in August, following the seven year low of 45.9 in July after the Brexit vote. For those unsure how this works, a figure under 50 denotes a contraction within the sector, so the sector still contracted – but at a far lower rate than July as things stabilise. Hopefully there will be signs of expansion in upcoming months.
Undoubtedly the full effects of the vote will take many years to manifest themselves, but it is heartening to see that the initial knee-jerk reaction in July has been followed by a swift bounce back for the construction sector. I expect the large long-term projects to be those facing the greatest degree of uncertainty and will be watching these with interest – Hinkley Point anyone?
With Brexit negotiations set to commence shortly, the sector will undoubtedly face an extended period of uncertainty, though of course a weaker pound now makes inward investment more appetising from overseas companies from that point of view.
The fact is that the construction industry is strong enough the weather the Brexit uncertainty and that there remain great opportunities out there in the property market – you just have to look.