Michael Staines
Michael Staines

12.35 6 Mar 2019


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More than 70% of construction industry firms have not carried out any preparations for Brexit.

A new survey, carried out on behalf of the Construction Industry Federation (CIF), has found that over 40% of firms believe Brexit will have an " immediate negative impact" on their business.

Some 42% said they are currently trading with the UK market - with a third noting that more than 20% of their revenue comes from the UK.

In a statement, the CIF said the failure of so many firms to carry out any form of Brexit impact assessment or ‘Day 1’ preparation plan is likely to " prove costly for a sector that relies heavily on advanced planning."

Brexit

CIF Director General Tom Parlon said that with 23 days to go until the UK is due to leave the EU, companies are still struggling to plan for the fallout.

"Many companies were already struggling with increasing input and labour costs with minimal cost recovery and Brexit, if no plans are in place, will add to the costs," he said.

"Delays in the delivery of materials also have the potential to lead to penalties and additional costs that contractors and their subcontractors could struggle to address.

"With house-building so tenuous outside the Greater Dublin Area, even minimal Brexit-driven increases could be the difference between securing development finance or otherwise."

UK Market

The survey found that nearly 80% of Irish construction businesses have no plans to diversify markets after Brexit .

Meanwhile, 10% of companies expect Brexit to have a positive impact on construction due to " an influx of businesses to Ireland from the UK post-Brexit."

On Newstalk Breakfast this morning, the Minister of State for European Affairs Helen McEntee said businesses in all sectors need to make sure they are prepared.

"Even in the case of a Withdrawal Agreement being agreed, whether it is next week or in a couple of weeks time, Brexit means change," she said.

"People need to understand that.

"It means that the UK will become a third country - whether that is for customs or trade.

"Think of that - Who is your supply chain? Who is in it? Have you spoken to them yet? Have you spoken to people in your business?

"Just to be aware of all of the possible changes."

Customs

The CFI survey, carried out by PwC, found that the industry is going to need significant support to deal with the new customs requirements on both sides the border.

It found that 72% of companies have either limited or no experience of the customs requirements for importing goods from outside of the EU.

A further 57% have not considered the impact additional custom duties and requirements  may have on their business.

Supports

Mr Parlon said the CIF has " long advised its members to take steps to prepare as much as possible for a range of post-Brexit scenarios."

"The industry is a key driver of Irish economic growth and is now emerging from a decade long of underinvestment," he said.

"Despite Brexit uncertainties, the industry will continue to be central to Ireland’s economy in the post-Brexit period."

He urged the Government to increase its supports toward the industry, and particularly SMEs, to " insulate the economy from the worst impacts of Brexit."


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