Amid despairing businesses up and down the UK, there is one sector that appears to be relishing the opportunities that Brexit might bring.
The middle market construction sector has seen confidence soar to its highest level in over 18 months according to RSM’s latest quarterly Brexit Monitor survey.
Whilst sentiment amongst most middle market sectors saw a marked drop that was predictable considering the scale of economic and political uncertainty, construction has seen a giant leap in optimism, with an overwhelming 68 per cent believing Brexit will have a positive effect on their company in the next 5 years.
The survey canvassed over 300 middle market business leaders operating primarily in manufacturing, technology, media and telecoms (TMT), consumer, financial services and construction. It found that business sentiment about the impact of Brexit on their own company performance over the next two years had dropped to its lowest level since RSM started its survey in Q3 of 2017, registering just 90 on RSM's Brexit Monitor index. The index measures sentiment between a range of 0-200, where any score above 100 is positive, and any score below 100 is negative.
However, when split between industries, the construction sector soared to an index score of 129 on their own short-term company prospects and 130 when asked about the economy over the same period. The contrast is stark. No other sectors feature in positive territory, let alone with scores that sit so comfortably in positive territory. Long term prospects were even more upbeat, registering scores of 143 and 145 respectively. Only the consumer sector could be regarded to have a more buoyant view in the long run, as other sectors still expect Brexit to have a more negative, or at best neutral effect, on balance over the next five years.
Many operating outside of the construction sector may find these findings surprising. However Kelly Boorman, partner and national head of construction at RSM sees them as consistent with the mood she’s hearing from within the middle market sector:
Construction firms have been and will continue in the short to medium term to be somewhat shielded from the wider challenges and uncertainties most other sectors face. Full pipelines, particularly for housebuilders; a continuing appetite from city funds spurred by government policy and social demand; unchanged planning regulations and; a government that remains under huge pressure to deliver on its own housing targets present a combined outlook for the sector that conveys a greater level of certainty than perhaps is the case for others. These factors will continue to offset any wider concerns around what economic and political challenges Brexit might present.
'The other factor to consider is that unlike the larger corporate institutions and multinationals that will be exposed to a greater degree, smaller middle market firms are aware of their ability to be more agile to changing circumstances.'
For further information, view RSM’s five-point plan on how to prepare for Brexit.