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Brexit - Industrial Development

We are now possibly weeks away from a final agreement on the Brexit negotiations. As a commercial architecture practice we are neither pro-Brexit, nor against leaving the European Union, but the mandate granted to the 2016 Referendum cannot be ignored. Therefore, we must ask ourselves the question: how might this decision affect the commercial building sector in Scotland?

We have been appointed architect and Principal Designer on a number of industrial, commercial and distribution developments throughout Scotland and demand for industrial space has grown since the last financial crash and the major 2008 recession. But can this continue beyond March 2019?

Depending on the final deal for Brexit, some sectors will fare better than others in the post-EU United Kingdom.

It may be that export and import tariffs are imposed upon UK companies which could potentially make the products they make or sell less competitive. Import duties could increase costs of manufacturing, increasing inflation and leading in turn to higher interest rates that could tip industry into a spiral of decline. 

However, if we are to see tariffs being imposed and UK industry suffering then this might be reflected in a lower value of the British pound which could counter the effect of any tariffs as exports would remain good value to the remaining EU member states. In addition to this, dependent on the outcome of the negotiations there could be a relaxation of regulation and 'red tape' that the proponents of deregulation claim would give businesses freedom to grow and prosper. There is of course also the tantalising offer of new markets across the globe, subject of course to the UK striking new bilateral trade agreements with them. 

It will undoubtedly be a challenge, but we may well see more industrial and warehouse development post Brexit. It may steer the economy on a profoundly different path and provide impetus - and the urgent demand, through the necessary restructuring of supply chains and logistics - for sector to innovate, expand and develop. 

As a practice we shall be watching the sector closely and hoping to play our part as architects, to help deliver the buildings required of modern industry and manufacturing, and to shape the new UK beyond 2019.

- SG


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