Will Brexit Impact the Construction Industry?

Since June, the United Kingdom has been in a continual stir. The vote itself was relatively close and there were going to be tensions regardless of the results. The question is if…

construction industry

Since June, the United Kingdom has been in a continual stir. The vote itself was relatively close and there were going to be tensions regardless of the results. The question is if all this will affect the construction industry.

The answer, sadly, is that it already has. July 2016 had the fastest overall decline in construction since June 2009. That alone is pretty scary, but we need to take more factors into account.

Here are the most important details about Brexit’s effects on the construction industry:


Property prices have been rising for some time now. That has lead to a severe decline in home ownership. In 2004, the average figure for the UK was 70.9%. In February 2016, the number was 64.1%, having shrunk by 6.8%. The percentage hasn’t been this low in 30 years.

construction industry

This decline has had considerable effects on the market. It’s quite straightforward: People don’t have enough money to build houses for themselves.

The 2008 financial crisis is also worth noting. The construction industry is still affected by it to this day. Companies are very cautious, and they build new houses only when they know they will be sold.

It’s fair to say that the industry wasn’t in a great position before. Brexit, however, seems to have made the situation worse.


Uncertainty always makes buyers more reserved. After Brexit, people are unsure if their best move is to start building a house. As a result, there is less demand.

The purchasing manager’s index (PMI) is a good indicator of an industry’s health. It takes into account several factors like new orders and employment environment. From June to July, the PMI for the construction industry fell from 46 to 45.9.

While the difference may sound small, it appeared only over the course of a month. Such a sharp decline in construction output hasn’t been seen since June 2009, during the financial crisis.

Furthermore, employment in the construction sector has fallen for the first time in three years. The number of voluntary leaves has overtaken the number of new employees. Subcontractor availability is also experiencing a sharp decline.

construction industry

The decline seems to be slowing down. Still, it is still uncertain at this time how things will develop. It is too soon to say if the following months will continue the trend or not.


The United Kingdom hasn’t left the EU yet. The separation negotiation alone will take two years. Construction companies have seen a decline due to older reasons and the population’s fear.

As we mentioned earlier, people are cautious. They don’t want to make an expensive decision and regret it later on. Sadly, this wait-and-see approach is hurting the construction industry and the economy as a whole.

Once the dust settles, people will regain their confidence. Then, the sector can start recovering. Government projects may also give the industry a boost, but it may be too soon to talk about that.


Things may be a tad bleak now, but we’re not going anywhere. You can count on us to provide you with high-tech multifoil insulation to make sure you get the most out of your home.

It may be too early to talk about Brexit’s long-term effects, but we’re optimistic. There will always be demand for high-quality insulation, after all.

To get a demonstration of how good our products are, you can order a free sample pack right now. You’ll get some data sheets as well as product samples. We let out products speak for themselves.

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