On 18 April, the British Prime Minister Theresa May called a General Election for 8 June. An election could afford the British Government the opportunity to develop a stronger mandate (its current working majority is restrained at just 17) as it embarks on Brexit negotiations. The underlying questions are how will the UK economy and built environment sectors react to further uncertainty and what can Irish exporters expect. Brexit raises the prospect of new challenges to the geoscience sector in Ireland and its companies that supply professional services to the UK economic infrastructure and civil engineering sectors. Enterprise Ireland – and Irish export policy designed to navigate Brexit – outlines that Ireland’s response must be twofold, in terms of supporting Irish companies that are already embedded in the UK, but also supporting diversification into new and emerging markets.

Embedding the Irish skillset

Geoscience Ireland (GI), the business development network supporting 33 Irish geoscience companies in export markets, agrees that Ireland must work to support its companies that have established and sustained themselves in the UK. GI member companies have a strong track record and diverse project experiences in Britain, while more than half of its members have offices or depots situated across the region which are supported by full-time UK managing directors and staff. To embed the Irish skillset in the UK built-environment industries, Enterprise Ireland (EI), as part of its Brexit strategy, will be represented at a pavilion at this June’s National Infrastructure Forum (NIF) in London. The NIF provides high-level engagement for the public and private sectors and presents a strategic opportunity for Irish companies and agencies to communicate a clear message that Irish contractors and consultants have the necessary skills and experience in a sector that has already outlined those skill shortages exist. This is an issue that is further compounded by the impending scenario that the UK may not be able to easily import skills as required from the EU. EI will promote Irish businesses as long-term, agile collaborating partners to developers and investors in the UK. While GI member companies remain resilient and pragmatic with regard to identifying and bidding for opportunities in the civil engineering and construction industries, Irish companies supplying into the UK must contend with uncertainty in investment decisions and fluctuations in the exchange rate. As outlined in a recent feature in the Sunday Business Post, GI noted that the exchange rate (€1) jumped from 71p in summer 2015 to 85p on January 1, 2017. This 20 per cent increase puts pressure on Irish companies in pricing their services for the UK market. GI companies that have its cost-base in the UK (i.e. staff and overhead costs) may be able to navigate this issue better than Irish companies who traditionally repatriate earnings to Ireland. In learning the outcome of last June’s referendum, a negative sentiment around developments in the UK initially compounded an overall negative outlook for the market. However, as outlined by the Royal Institution of Chartered Surveyors (RICS) reporting in 2016, expectations are improving as workloads continue to moderately rise along with improving future growth expectations, though financial constraints and skills shortages are still evident. In Q4 2016, RICS identified that road and rail developments are set to be the fastest-growing infrastructure sub-sectors in 2017. The Glenigan Index for March 2017 notes that, comparable to Q1 2016, civil engineering ‘starts’ were considerably lower in Q1 this year representing a 17% decrease. However, since March, there has been a marked increase in both infrastructure and utilities work. Indeed, GI is encouraged by the progress of UK ‘mega projects’ such as High-Speed Rail 2 and further strategic rail developments, while the expected developments at Heathrow Airport and Hinkley Point power station are also good news for the market.

Uncertainty

The prime minister – who is working toward completing Brexit negotiations by the March 2019 deadline – did not offer any details about how Brexit may be shaped, thus prolonging uncertainty over the built environment and surely the continued deferral of major investment plans. In February, May published a 77-page white paper, formally setting out details of the Brexit strategy and she now wishes the electorate to trust her government in delivering on this. She said, “It’s about asking the people to trust me, to trust us in government, to give us that mandate to go and get that really good deal.” A stronger mandate for the Conservative Party may indeed provide greater certainty for the Brexit strategy and may render the process completely irreversible. In the meantime, only uncertainty is certain. For further information on exporting professional service to overseas markets, please contact Andrew Gaynor, Business Development Manager, Geoscience Ireland (andrew.gaynor@gsi.ie) or visit www.geoscience.ie