Dear Voters: what have you done?

The referendum campaign has been a highly toxic and entirely unedifying experience, played against a backdrop of misinformation from both sides and leaving the country bitter and divided.

It has been an exercise of democracy at its greatest and its worst, and David Cameron must be wondering quite what he has set in motion. 

But the people have spoken, and the Leave campaign has won. So now it begins. So now we leave the EU, the single largest trading block in the world.

Now we enter years and years of uncertainty as we unwind our involvement in the EU and seek to negotiate new trade deals with nations around the world. A process that will take decades.

It remains to be seen if the economic doom and gloom predicted by nine out of 10 economists will transpire.

But with the pound plunging to a 30-year low against the dollar and the stock market braced for a fall in excess of 10 per cent this morning, it seems certain that we’re set for a significant economic slowdown while the markets take stock, while investors assess their positions and while our politicians work out what on earth to do next.

So what does this mean for construction?

Well, some may argue that pulling up the drawbridge on our European partners might give a boost to our domestic contractors, who have always struggled to compete with the size and power of their European counterparts.

Of course, many of the European contracting groups active in the UK are UK-registered companies employing UK residents, so perhaps this might not be that desirable.

In terms of the export market, UK construction plc has never had an enormous footing within the EU, so some may argue that it will have a negligible effect. Sadly, I suspect it will not.

The UK construction market has, to a greater extent, always been a confidence market. It does well when the wider economy does well, but not so good when it doesn’t.

The reality is that the construction sector has yet to recover to its 2008 output levels and the Brexit vote is sure to prolong this for many years more.

Infrastructure impact

The wider impact on the economy will predicate an extension of the existing austerity measures, and with that we could see many of the proposed investments in our infrastructure delayed or cancelled.

Of course, it’s possible that the government may take an approach of borrowing to invest in infrastructure to help stimulate the economy, but the experience of the past six years would tend to suggest this is unlikely.

In terms of the legal consequences, well who knows, but it’s sure to mean lots and lots of work for lawyers around the UK.

As a partner in a large UK and international law firm, maybe this should make me happy. It doesn’t.

[this post was originally published in Construction News on 24th June 2016]