The Strategist

UK commercial construction sector stops because of Brexit

03/04/2019 - 11:43

According to the estimates of the Royal Institution of Chartered Surveyors (RICS), political uncertainty in the UK has had a negative impact on the country's construction sector. In the last quarter of 2018, RICS notes, almost no applications were submitted for the construction of commercial and industrial facilities, and this is the first time in the last six years.

David Holt via flickr
David Holt via flickr
In a review of the construction market in the UK in the fourth quarter of 2018, the Royal Institution of Chartered Surveyors reiterates Brexit and the associated political uncertainty as a serious negative factor for this market. According to RICS estimates, the number of new applications for construction in the last quarter of last year in the country grew moderately as a whole. But there were no new applications at all in two sectors - commercial and industrial real estate. This is happening for the first time in the last six years.

Political uncertainty on the background of the approaching Brexit causes difficulties in obtaining bank loans and securing financing for construction projects.
78% of the surveyors polled by RICS called financial difficulties as the main obstacle to construction.
And, according to most of them, the situation with obtaining loans has only worsened over the previous three months. Experts note that the slowdown in construction is particularly noticeable in London and in the south-east of the country.

Meanwhile, the number of applications for construction grew even against the backdrop of political uncertainty in a number of sectors. Thus, among the infrastructure projects, applications for the construction of roads, railways and energy facilities were especially actively submitted. In addition, social and individual housing construction felt good in the fourth quarter.