Better Off Out?

According to a survey of ECA members, electrical installers are optimistic about Brexit. Steve Bratt, ECA CEO takes a closer look at the findings.

Since the UK made its landmark decision to leave the European Union, there have been more questions than answers for UK businesses. One month after the vote, the CBI’s chief economist Rain Newton-Smith said that there were “weak expectations for new orders, a sharp fall in optimism and a scaling back of investment plans.”

This uncertainty is likely to continue for some time, given that the government is still developing its aspirational model for future relations with the EU, and that formal negotiations with Brussels are yet to commence.

Against this backdrop, the electrical and building services engineering sector is, however, somewhat more positive, according to findings from a recent ECA survey, held alongside BESA and SELECT.

Between 11th August and 5th September this year, some 700 respondents from across the entire sector replied to our Brexit survey. This level of response, during the holiday season, is a strong indication of interest in Brexit.

Almost half of survey respondents (46%) believe Brexit will have a positive impact on their company in just five years’ time, with less than one in five (19%) saying it will have a negative effect. Just under one-quarter (23%) said it would have no apparent impact.

It’s worth noting though that larger firms were less inclined to believe Brexit would help their business, with 3 in 10 firms (29%) stating it would have a negative impact.

While in 10 years’ time, respondents were even more optimistic about the impact on their firm, with over half (51%) saying that the overall effect of Brexit will be positive, while just 10% believe it will be negative.

What will be the overall impact of Brexit on your company?
However, many firms (47%) indicated that they expected the cost of materials to increase, while a further 35% said they believe Brexit will lead to delays in government construction projects.

Just 1 in 4 respondents (25%) say Brexit will contribute to skills shortages. However, there were mixed views among larger contractors, with 40% agreeing that Brexit would ‘worsen the shortage of qualified workers’, and 38% disagreeing with this statement.

Significantly, respondents said that their top negotiating priorities (for the government) were full access to the EU’s single market, tacking back control of employment legislation, and flexibility to negotiate trade deals with non-EU countries.

Freedom of movement for workers in the industry was not a top priority for most respondents, reflecting the fact that engineering contracting firms primarily rely on UK human resources.

While the mood is generally positive, it is very early days for Brexit. There are many milestones and hurdles to come, including invoking Article 50 itself, followed by politically complex negotiations.

No matter how our relationship with Europe develops, the issues facing our sector – not least payment and skills – still need to be addressed.

For now however, our members tell us it’s business as usual – including all the opportunities and challenges – for the electrical sector and wider building services industry.