Category: Office Design
Over the past few years, as the UK economy has continued to recover from the 2008 financial crash, the office fitout sector has seen considerable growth. However, with the majority of the British public voting to leave the European Union, the country has once again been thrown into a period of economic uncertainty.
The 'Brexit' debate has dominated the headlines for months, with many people speculating about the potential benefits and drawbacks for different industries. So what effect is leaving the EU likely to have on the office refurbishment industry and will the result of the EU referendum impact upon your planned project(s)?
From the point of view of the typical business, one of the biggest potential repercussions stemming from Brexit may be access to funding. Due to the costs involved, office fitout projects are often funded through borrowing, but high street banks have already seen a drop in shares and this may result in less willingness to lend.
This lack of funding, which is most likely to affect small and medium-sized enterprises, could result in a significant drop in demand, hurting design firms. Meanwhile, depending on the terms negotiated, designers may have less access to overseas workers or find it more expensive to import materials.
Already, the uncertainty appears to have had an impact. According to the economist Amandeep Bahra, business investment, one of the key indicators of office growth, declined for two consecutive quarters in the build up to the referendum, while annual business investment has dropped for the first time in six years.
Reasons For Optimism
With that being said, there are also some reasons for optimism surrounding office refurbishment. Sarah Dawood, writing for Design Week, suggests departing the EU could lead to greater freedom over state aid, which could make it easier for the government to give financial support to SMEs.
Some design firms have expressed optimism over a reduction of 'red tape' governing the industry. Furthermore, despite Brexit fears, several high-profile fitout projects have continued unaffected. It is estimated, for instance, that Manchester currently has 60,000m2 of new office space under construction.
Posted 23rd January, 2017< Back to articles