When I started thinking about writing this month, I expected there to be some fallout in relation to how the EU referendum would affect business. To be perfectly honest, I actually believed that it would be ‘business as normal’ after a close call by the Brexiteers. Then, as we turn another corner on this political and dare I say it corporate rollercoaster ride we seem to have been forced to take, we now have a new PM. That one I wasn’t expecting to be writing about for another few weeks at least.
The culmination of weeks of bitter rallying, final results and subsequent resignations have astonished the world and left Britain in uncharted waters. Whichever side of the debate you were on, it is obvious that we are entering a period of unprecedented political and economic volatility.
Whilst the media has been consumed with the economic fallout, it is clear that if we are to move forward positively we need progression that embraces diverse opinion and looks to take the underlying issues and develop them positively for everyone on both sides of The Channel.
It has been extremely difficult for us to decipher the full ramifications of the result, but we need positive principles that advocate tolerance as we move forward. Every day seems to be bringing some monumental development that is altering the course for everyone.
Building On Experience
There have been a number of positive forecasts and announcements however, post referendum which bode well for the construction sector.
Persimmon for example, appears confident regarding the next 12 months having announced a 6% increase in new home sales for 2016, with “market fundamentals remaining strong”.
In a very positive statement, Redrow has declared record results with turnover up 20%, commenting, ‘Reservations continue to be taken’ with ‘strong reservations at new sites launched’ recently.
Another company that is remaining positive in relation to building prospects post Brexit is Carillion. The company stated that revenue and margins were up for the first half. Richard Howson, Chief Executive stated that “the group was on track to deliver growth this year with 97% of targeted revenue in place for 2016.”
According to RICS however, property prices in the SE have dropped considerably with a nervousness rippling its way through buyers’ minds. Equally, in a recent BBC report, it was cited that many purchasers in the area are demanding huge price reductions right at the last minute. That said there have been very positive comments made regarding growth for the property market, which is expected to begin in the Autumn.
Bank of England governor Mark Carney has indicated a shift in monetary policy when speaking to the Treasury Select Committee this month. Things may be more positive than we think, after he refused to verify that interest rates will move upwards, which he previously championed this year. He has been quoted as saying: “It is not yet our judgement that it could go negative. If we were ever in a situation where we needed more stimulus we have other options.”
Other stimulus options were also mentioned should the UK economy slow further than expected, although the negative interest rates adopted by Japan, Switzerland and Sweden to boost growth was not discussed. According to the Financial Times the Governor said to MPs “We do all need to be prepared this economy could be hit by bigger shocks particularly from abroad”.
So What Happens Now?
Some key glazing industry notables have been discussing the referendum and how it could affect business.
Roy Frost, Managing Director Deceuninck UK stated that ‘The fundamentals of our market and our Deceuninck UK business are very strong. In or out of the EU, our prospects are excellent,’ while Bernard Vanderper, Director North West Europe commented that the company is ‘a world class, global systems company operating in 75 countries, most of which are outside the EU. The UK, US and Turkey are among our three fastest growing companies.”
Mark Westbrook, Managing Director FrameXpress considered that irrespective of stance on the referendum, it was important to be looking forwards and not backwards. “Times change and we have to embrace that. Look at what happened to Kodak who refused to adjust. That company is gone due to inflexibility and went almost overnight. Now, we should be positive and hopefully this will encourage great things for British manufacturing. It gives us a chance for growth and there is great potential in this country”
Gareth Mobley, CEO Solidor and Residor raised concerns regarding the potential ‘spin’ post Brexit, hoping that people would not be reactionary after ‘some door companies immediately jumped the gun and raised prices, … by more than the exchange rate.’ It appeared to be a message of hope that we should and can override opportunism, commenting that “Surely it’s better to be up front with customers, rather than bury bad news when they’re distracted?”
Mark Walker, Design and Marketing Manager at Selecta Systems commented that senior management at the company considered that Brexit would create opportunity and that as an industry we must accomodate the changes.
When discussing issues with European colleagues and business acquaintances, our media seems far more fired up than they do in respect of the referendum result, with many being quite calm about coping with changes as they are introduced.
Certainly from looking at the news there are wonderfully optimistic stories coming through, with companies such as TruFrame Direct, Kommerling, Morley Glass and Thermoseal all highlighting growth and extremely positive developments. Companies are increasing staffing levels to cope with demand and as we hurtle towards September and one of the largest global exhibitions, Glasstec, about to open its trade fair doors, we see companies such as Bystronic, Hegla and Guardian Glass committed to spending budget and using the European platform as a means to reach a global audience. That surely is reflecting well, both nationally and internationally?
Written by Helen Duval