Brexit: 30% market uncertainty for Europe’s demolition and concrete cutting industry?

Published 27/12, 2018 at 09:17

One more year has come to its end. Businesswise for the industries PDi covers it has been a rather good year, with many markets booming, or at least doing well.

In my own country, Sweden, there have been some really tremendous years, but now I believe we have reached the limit; in the autumn the Swedish building and construction industry dropped 11%, admittedly from a very, very high level. We are still booming, and actually there are plenty of large projects going on all over the country, with plenty of demolition and concrete cutting projects of all sizes. However, some projects have been put on hold, but most contractors believe that the whole 2019 will be a good year, except at the very end when any evidence of a recession will be more obvious. 

One thing though in Sweden that needs to be stressed is the fact that we still don’t have a government following the election in September. There are worries about planning for the future, and in what directions construction industry regulations will go when we finally have a new government. Sweden’s current parliamentary situation is due to a fairly new party Swedish Democrats (Sverigedemokraterna), which is strongly nationalistic and has a strict immigration policy which became the third biggest party at the recent election.  This has meant that none of the other parties can form a government unless they cooperate with the Swedish Democrats, and no one wants to go into coalition with the Swedish Democrats. The Social Democrats and the Conservatives (Moderaterna) are the two biggest parties, but they are too far apart on many issues to form a coalition. This has presented quite a tricky situation indeed. But Sweden has set a new budget for 2019 created by the Conservatives and Christian Democrats, and was approved by the Swedish Parliament recently. Even though we have a difficult parliamentary situation in Sweden, I believe the situation with Brexit in the United Kingdom is far worse. Many people that I talk to, in particular people working for manufacturers exporting to the UK, are quite worried.

The key concern is what will happen if there is a hard Brexit? What will the consequences be? What will happen regarding import and export duties and customs backlogs? The day when the UK leaves the EU is coming closer and closer. If there is to be a hard Brexit it will for sure hit hard both British and companies that do business in the UK, and of course customers on both sides. The UK is for instance the biggest machine rental market in Europe; its demolition and concrete sawing industries are also some of the largest in Europe. I don’t know how much in percentage terms these UK markets represents, but maybe some 30% of the European demolition and concrete cutting businesses? We will for sure not lose this business, but there may be delays and problems that will affect turnover and profits during 2019. 

In effect, there is little doubt that a hard Brexit would affect suppliers heavily, but I guess not so much will now be settled over Christmas and New Year, with January presenting the ‘crunch’ time. Maybe Theresa May has something up her sleeve? Or will there be another referendum concerning the UK being a part of EU. I guess what is happening in the UK might discourage other European countries from leaving the EU, but with that said, I would like to thank all our readers and advertisers for this year, and wish you all a peaceful Christmas and Happy New Year.

Jan Hermansson

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