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Brexit: What does it mean for office fit-outs?

Brexit could significantly impact the UK’s Design and Build industry due to the sector’s dependency on both labour supply and materials procured from the EU. The prospect of tariffs and quotas, if enacted, would increase the overall cost of projects and construction. However, despite this, there are also opportunities for UK based businesses to begin to pivot and focus on using locally sourced products and labour in their projects. At Dthree Studio, we are committed to helping our clients prepare for the Brexit transition and mitigate any impact it may have on office fit-out delivery.

In this blog, we highlight the potential impacts of Brexit on our sector, that clients should consider when planning their office design and fit-out:

Labour Force

With the freedom of movement of people coming to an end on 1 January 2021, Brexit may dramatically impact an industry significantly reliant upon EU-sourced labour. To best prepare for a post-Brexit future, companies should ensure that any retained EU workers are eligible to apply for settled status in the UK and are aware of the legal procedures and paperwork they must now work through.

As a result of a potential labour supply issue from Europe, in the short-to-medium term, project costs may increase. The UK’s ageing workforce and rising wages at home for European workers will compound labour supply issues. Aside from an uptick in labour costs, we should expect to see some evidence of short-term delays in completing projects for the same reasons. Project managers and fit-out firms should already be thinking about measures to upskill the available workforce in the UK to avoid costs in the interim and longer-term. The construction skills fund, which helps train people looking to move into the construction industry, should start to bear fruit as employers may look to further train the domestic workforce.

Procurement

The potential change in the costs of materials sourced from mainland Europe may also pose a challenge to fit-out projects. In the event of tariffs, UK-based businesses may need to raise prices to absorb the increased cost of materials, with these potentially being passed on to end-user customers.

All of this is reliant on the outcome of a potential UK-EU trade deal. Yet if tariffs and quotas come into effect, we will likely see UK-based businesses begin to search for local or UK-sourced products and materials in their projects. If tariffs harm current supply chains that extend into Europe, we expect to see these shortened significantly to the extent that the majority of products are sourced from within the UK, at least in the short term. In 2016, there was a general expectation that a no-deal Brexit would deliver tariff increases of around 10% on most materials, the length of the ‘divorce’ has meant that this rise is likely to be subdued. However, it could still rise to such levels in the event of a no-deal outcome. As of December 2020, there is still a general lack of clarity about how smooth the importing and exporting of materials to/from Europe will be post-Brexit. However, if a trade deal cannot be reached, the increased bureaucracy of importing and exporting from Europe will be a significant hindrance for the industry and will likely increase the time needed to complete projects. Frustration at complex import and export procedures will encourage UK businesses to source materials from local suppliers as much as possible.

If you are considering a flexible workplace solution, either linked to Brexit or your current business strategy in the wake of this year’s pandemic, our parent company DeVono Cresa can help in this regard. After understanding how your business works and its requirements, we will build the right flexible workspace solution for you. Start your search here.

Post-COVID

Although Brexit will have a significant impact on our industry, COVID-19 has already done so. With increased home working levels, many have begun to question the importance of having an office space. However, with multiple vaccines about to be rolled-out, and after many months of home working and video conferencing fatigue, balance in the market is beginning to restore. People are recognising and remembering the benefits of the physical office for promoting collaboration, company culture, creativity, and for providing the right sort of environment for younger workers to learn from their more experienced colleagues. Additionally, the lines between work and home have blurred for many, with it proving to be an ever-greater challenge for those who do not have a conducive environment to work remotely.

Despite this, it is clear that workspaces will have to change post-COVID. Dthree Studio can help you redesign your workplace for a post-COVID era by managing and mitigating the prospects of a reduced, or more flexible and agile headcount, the need for social distancing, additional desired workplace agility, and more. Offices will remain highly relevant after both Brexit and COVID-19. We are here to help you as you consider the future nature of your workplace, how it is assembled and configured to best support your business, and how you take your product and services to market.

Communication is key

In this blog, we have touched on but a few of the issues that may impact the design-and-build sector post-Brexit. However, one thing that we believe is critical is to continue communicating with customers. With the increased uncertainty resulting from Brexit and COVID-19, customers will be looking for increased transparency from their design and build partners, and, rightly, will expect to be kept abreast of all possible issues that may have an impact on their project, its duration, and its cost. At Dthree Studio, we believe that communication is vital to maintain client confidence. Throughout COVID-19 and the post-Brexit transition, we have worked incredibly hard to ensure that our customers have been kept aware of any issues that may have impacted their own projects, and we’ve worked with them to provide the best possible outcome. That’s what everyone can expect from us.

If you would like to speak to the team at Dthree Studio about how Brexit may impact your fit-out project, or indeed any fit-out advice you may need, please do not hesitate to contact us at hello@dthreestudio.co.uk

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