The Brexit Fiasco

 

Following the overwhelming rejection of Theresa May’s Brexit deal in Parliament, there is now real concern amongst infrastructure clients that continued uncertainty will cause long-term damage to the sector. These concerns are heightened given that delays are starting to creep into major infrastructure projects such as HS2, the Wylfa nuclear power station, and Heathrow. 

In business, time kills a deal. And in the Infrastructure/Construction sectors this is even more true! With delays surrounding certain infrastructure projects, a large number of construction businesses will be unable to maintain the level of resources they’ll need over the next 25 years.  This will llead to restructuring, and may cause them to have to let some capability go.  Based on experience, we know that this will create very real problems in the future. Once talented individuals leave a sector to pursue other opportunities, it can be very difficult to entice them back. So what happens between now and the 29th March (and the months beyond)will be critical.

 

Despite Goldman Sachs forecasting a 10% rise in the value of Sterling this year, many clients in the Construction sector are concerned about its decline leading to increased pressure on material prices and margins. To some degree this has already happened, with the cost of imports from the EU rising to their highest level since 2011. Any decline in the value of Sterling, combined with the widening skills gap, leave many wondering how they are expected to deliver projects on time and budget. 

 

This toxic mix of increased costs, skills shortages, and the ‘Brexit fear factor’, has seen a number of sector leaders express concern that growth will stall.  With Theresa May’s draft Brexit agreement rejected by the House of Commons, there is as yet no clarity around how the EU skills shortage can be managed. Despite this lack of clarity, a number of our clients are still keen to press on in preparation for our exit from the EU. In light of this we are being asked to help find experienced change and transformation interim executives who can help them overcome these and other challenges.

 

On a positive note, the date of our exit from the EU could be pushed back meaning we should be able to operate as normal for a period beyond the 29th March. What is indisputable,however, is that some investors do not currently regard the UK as an attractive proposition.  

 

As we approach March 29th, we are increasingly supporting clients find experienced interim executives, as they seek to meet these challenges. This is especially the case in high impact areas such as Supply Chain & Procurement, Technology, Organisational Design, and Change & Transformation. If you would like to find out more about how Norman Broadbent Interim can help you, or discuss a specific assignment, please do not hesitate to contact Nick Behan on +44 (0) 0207 484 0106 or via nick.behan@normanbroadbentinterim.comfor an initial confidential discussion.