On June 23rd, 2016, the United Kingdom voted to leave the European Union after more than 40 years of membership. The process of going, commonly known as Brexit, has damaged various industries. There are already some ways Brexit is affecting different sectors within the UK. Here are some examples.
The UK construction industry is one of Brexit’s most immediately affected. The pound’s value has fallen sharply since the vote, making imported materials more expensive. At the same time, demand for new construction projects has decreased as businesses and individuals become more uncertain about the future. Additionally, there is also a lack of workers in the industry. Thankfully, there are ways that the construction industry is dealing with it. Here are some of those ways.
The lack of workers from EU countries means a shortage of skilled workers in the industry, one of them being engineers.
Engineers from other EU countries immensely helped the UK’s construction industry. However, some of these workers returned to their home countries when Brexit happened. The UK now needs to find ways to compensate for this loss, which is where engineering recruitment agencies come in. These agencies help hire new engineers from other countries worldwide, not just the EU. In addition, these agencies make it easier to hire more construction workers to deal with the lack of skilled workers in the country.
With imported materials becoming more expensive due to the falling pound, construction companies are increasingly turning to local suppliers. This helps support businesses within the UK and reduces construction project costs.
The UK’s manufacturing sector has benefited from being part of the EU’s single market, allowing manufacturers to sell their products tariff-free across the continent. However, the benefit became no longer available once the UK left the EU. As a result, the country is moving manufacturing inside its borders to deal with this problem.
As mentioned earlier, the UK is moving manufacturing inside its borders to deal with tariffs on exports. This helps support businesses and jobs within the country and become independent from the EU.
Investment in Automation
The UK is also investing in automation to compensate for the lack of workers. This investment will help increase productivity and offset the rising costs of labor.
Brexit has dealt the UK’s manufacturing sector a blow, but it is finding ways to cope with the new reality.
The retail sector is closely linked to both manufacturing and agriculture; as such, it too stands to be affected by any disruptions in the supply chain or changes to tariffs and subsidies. In addition, many retail workers come from other EU countries. This makes it harder for the industry to find reliable workers. The industry is dealing with it by changing its business model to a more online one.
Many retailers are shifting their focus to e-commerce to address the lack of workers. This helps businesses reach a larger audience and sell their products without relying on brick-and-mortar stores.
Banking and Financial Services
The UK’s banking and financial services sector has benefited from being part of the EU’s single market, as it has allowed banks and other financial institutions to passport their services across the continent without having to obtain separate licenses in each country. After Brexit, this benefit is no longer available. Banks now have to rely on so-called “equivalence regimes,“ which are less favorable. In addition, many banks have their headquarters in London because they are a significant financial center. If passporting is no longer possible after Brexit, some banks may choose to relocate elsewhere. The industry deals with it by preparing for the worst and hoping for the best.
Preparation for the Worst
Banks are preparing for the worst by making contingency plans in case passporting is no longer possible after Brexit. This includes opening branches in other EU countries and relocating some staff members to deal with the problem.
The UK’s tourism industry benefits from being part of the EU’s Schengen Area, which allows tourists from other Schengen countries to visit without needing a visa. Now, this benefit is no longer available. Tourists from other Schengen countries must obtain a visa before visiting Britain. This deters some people from visiting altogether. In addition, a weaker pound makes holidays abroad more expensive for Britons. As a result, some people may choose to holiday within Britain instead (which would benefit the tourism industry). Sadly, there is no real way to deal with this, and people from the EU have to get a visa if they want to enter the country now.
There is still much uncertainty surrounding Brexit and its implications for different industries within the United Kingdom. However, we can already see positive and negative potential effects on sectors such as agriculture and fisheries, manufacturing, retailing, banking and finance, and tourism. But each is following new ways to handle it. So, hopefully, they can thrive despite the obstacles Brexit may put in their way.