A recent report on BBC London News has addressed the growing concern surrounding Brexit and the impact it will have on the merchant sector.
Brexit Reporter for BBC London News, Marc Ashdown, explains how importing materials after Brexit could become increasingly difficult, especially products such as Timber which is largely imported from EU Counties.
Damian Thomas, AW Champion Ltd, featured in the report and commented on the problems surrounding the timber industry: “We are involved in the RMI market, jobbing builders really, loft conversions, garage extensions and if the homeowner then decides not to invest if there is any uncertainty then of course they won’t be booking those jobs and we won’t be moving the timber to them.”
Couple this with a lack in consumer confidence as well as the ongoing housing crisis and merchants could find themselves in a difficult position.
This has resulted in many merchants having to stockpile product in case there is a delay in shipping over to the UK. However, this could prove a risky strategy as uncertainty surrounding Brexit could result in certain markets, such as RMI, slowing down as consumer confidence decreases. If the building sector is not booking the jobs then stock will not be ordered resulting in merchants having surplus amounts and a limited cash flow.
BMF CEO, John Newcomb, also featured on the report, he explained: “We have a housing crisis in the UK; I think everybody knows that, anything that impacts on the availability of those materials which prevents us from building those homes, is important. The knock on effect is ‘are those houses going to be built?’ ‘Are those extensions going to be built?’.”
As well as this, a lack of assurance from politicians as well as knowing which way Brexit will go, whether this be a deal or no deal Brexit, means that merchants have been unable to plan which direction to take their businesses in.
Shanker Patel, Chief Executive of Lords Group, picked up on this point during the report: “Whether we have a deal or don’t have a deal we will have an impact. The question is what is that impact? The sooner we know whether it’s a deal or a no deal Brexit the sooner we will have that information. I think that is the key for us at the moment we need to know which way our exit is heading and then we can start to really plan in the detail.”
Marc also went on to explain that a lack of workers coming over from EU countries could also spell trouble. This could result in a serious skills shortage within the building industry as over half of all construction workers in London come from the EU and are already returning home.
As well as this, Rebecca Larkin, Senior Economist, Construction Product Association, pointed out that half a million workers in the UK are set to retire next year so will further add to the lack of a workforce in the building industry. And, while a push for home-grown skills training will help, it does not abate the situation entirely.
It would , therefore, seem imperative that politicians, and indeed those in the merchant sector and beyond, take stock of these growing concerns to ensure the future longevity of a successful industry.
You can view the BBC London News report in full here: