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27 June 2016

Industry responds to Brexit

Responding to the outcome of the EU referendum, the Institution of Engineering and Technology (IET) is calling for an urgent discussion to mitigate the impact on the engineering sector – which is vital to the UK’s economy.

The IET had published a statement of concern that a vote to leave the EU could result in a number of negative impacts on UK engineering, including exacerbating the UK’s engineering and technology skills shortage by making it more difficult for companies to recruit engineers from other EU countries.

Other issues identified included changes to access to global markets and companies, a decline in funding for engineering and science research, and a weakening of the UK’s influence on global engineering standards.

IET President Naomi Climer said: “We thought it hugely important that the role of UK engineering was considered as part of the EU debate.

“It was for that reason that we looked carefully at the issues affecting engineering, including the skills shortage, the global markets that engineering is a part of, research funding and global standards.

She continued: “We concluded that, at a time when we have a huge shortage of engineers, limiting the number of professional engineers that could come and contribute to our economy would affect the industry and the nation’s financial wellbeing.

“We were very careful to consider the options as they related to UK engineering but the result of the referendum is clear and we are calling for an urgent discussion so that any negative impacts can be mitigated for the benefit of UK engineering and our country’s economy,” Ms Climer concluded.

Meanwhile, Dr Christos Tsinopoulos, senior lecturer in operations & project management at Durham University Business School, said: “Brexit repercussions for the UK manufacturing industry will be questioned by many over the next few weeks and months. What we do know is that the integration across a supply chain is king. Research conducted by Durham and others demonstrates how a closely integrated supply chain, where there is an easy exchange of ideas and information, is likely to perform better. Supply chains know this and over the years there have been several efforts to bring manufacturers closer together. 

“However, the key point here is that to make this happen there needs to be a degree of standardisation in legislation, systems, policies, and even engineering methods. Over the last few years this has largely been facilitated by several European bodies. Many have been guided by the EU whereas others have been industry led. The result has been some highly integrated and efficient supply chains which have benefited many of us.

 

“The good news here is that given the high degree of integration of many of them they are relatively difficult to change in the short term. The bad news however is that in the medium and longer term there would be a higher incentive to do so. In a competitive environment where small changes can have significant impact on performance and relationships, switching between supply chains and countries may become an increasingly popular choice.”

 

CIBSE president John Field said: 'CIBSE is planning for life after the Brexit vote with the firm belief that our strong professional leadership remains the base on which the interests of our members and the public they serve can best be supported. We do not anticipate any significant alteration in the very positive engagement we maintain with members across the globe and suggest that the referendum result creates significant opportunities and commitments to increase engagement with regional, national and global interests.”  

Clarkslegal LLP has also considered the impact of Brexit on the construction industry and says that the greatest risk is the uncertainty that may be faced in the months and years ahead.

It says that some of the key risk factors for the construction industry relate to the workforce as many construction workers in the UK are migrants, particularly from continental Europe. It adds that with a pre-existing labour shortage, losing the free movement of workers across the EU will have a huge impact on the UK’s construction work force.

Another risk factor identified by Clarkslegal relates to imported materials, with a study from the Department for Business, Innovation and Skills in 2010 showing that 64% of all construction materials imported into the UK came from the EU.

Clarkslegal also highlights issues surrounding the implementation of EU policies, foreign investment, EU funding and legal changes.

However, it points out that even if sources of EU funding are no longer available, there will still be opportunities for international investment through initiatives such as its own Commonwealth Environmental Investment Network at www.theceip.com.

 

 

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