Consequences of Brexit on UK Construction Industry

Fundamentals of Economy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Brexit Consequences for UK and EU.....................................................................................1
Impact of Brexit on Construction Industry of UK..................................................................2
Should Government need to intervention...............................................................................4
REFERENCES................................................................................................................................7

INTRODUCTION
Exit of British (Brexit) from European Union, arise a number of consequences for UK
industries, where a new trade agreement have raise tariff rates that causes inflation. It has also
increased the transportation and communication costs, including constraints on immigration,
have affected labour force of this nation also (Ahmed and Fahey, 2019). All these things result
into slowdown economy, that highly affect growth, trade as well as employment. In this regard, a
report is prepared on impact of Brexit on UK industries, particularly construction ones, whose
operations are highly depended on trading at international level. For this purpose, problems that
have been faced by chosen industry due to Brexit will also be explored. Furthermore, to arrive at
conclusion, if government of this nation needs to intervene or not, for addressing market
inefficiencies will be discussed in detail.
MAIN BODY
Brexit Consequences for UK and EU
Brexit process has begun in 2016, when residents of UK are in high proportion favour
with government's decision to leave RU (Duda-Mikulin, 2019). The purpose behind this is just to
regain the control over immigration and borders, which will rise nationalism across the world.
But, apart from causes to leave EU and its benefits, it has seen that it highly affects economy of
UK, with slow in business growth and trade, including rising rate of unemployment. This
uncertainty has also reduced economic growth from 2.4% to 1.5% since 2015 to 2018, that led to
reduce its currency also (Brexit: Its effect on the construction industry, 2019). Furthermore,
Brexit eliminates the tariff-free trade of Britain from other EU members, which raise its export
costs also. It would affect exporters of UK because it results in making their products more
expensive in European marketplace. Along with this, it also leads to increase price rates of
import in UK, where more than 1/3rd of products are imported from EU (Flannery, Ajayi and
Oyegoke, 2019). In this regard, higher import price create inflation in economy, that ultimately
reduces living standard of people. As London is considered as financial centre of UK, so,
slowdown of economy also affects business of companies in this region, which has almost
diminished by approx. 11% (Brexit Consequences for the U.K., the EU, and the United States,
2020).
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