The western world as we knew it has been shaken from its core. Donald Trump, the billionaire businessman with no experience in politics has been elected as 45th President of the United States, the most powerful man in the world. The UK has voted to leave the European Union, and at any cost! Both results rocked the nations, and caused disbelief. The French Presidential Election is underway, and now, the world is preparing itself for more "big" surprises. But what does this all mean for Architecture and the Construction Industry, particularly in the UK and London? Let's try and analyse the state of play, and what we should expect to see from industry in the coming years.
In June 2016, the UK referendum vote was made to leave the EU. Since this time, markets have been volatile, and with a large drop in the value of the pound, the lowest it has seen for 31 years, there has been uncertainty in the stability of the UK's economy and hence, major players in the construction industry have considered leaving the UK, and setting up headquarters elsewhere. Because of the uncertainty in the markets, property developers and homebuilders are just not commencing projects, which had previously been set to start, had a "remain" vote won. Several high-profile Architect's practices are declaring planned job cuts and a decrease in recruitment activity, to safeguard profit margins and efficiency in productivity.
We ourselves, have seen clients become hesitant to commence work, and these clients are now constantly at a point of abeyance, waiting for assurances from the now Theresa May PM led government, as to how "Brexit" will be intelligently negotiated and incorporated.
Well thank goodness for the Autumn Statement. Philip Hammond announced £23bn into a new National Productivity Investment Fund (NPIF) which is investment into productivity, including transport, digital communication, research and development and housing. £2.3bn into new housing infrastructure and £1.4bn for new affordable homes, and £1.7bn to speed up construction of new homes on public sector land. Further, £10m to support culture and heritage projects across the UK and a slash in corporation tax to 17% by 2020. His announcement is timely, as these assurances express to developers, particularly those like our clients, that the UK is providing a boost to its own economy, and this is an incentive to developers, housebuilders and architects alike. The Chancellor is stating that it is safe to invest in the UK, and there are a plentiful of benefits for doing business here. With motivations from the Chancellor, and the Mayor of London pressuring his high housing targets, we can once again focus on developing innovative architecture and beautiful designs, ones which are intelligent with its use of space, and those which are geared to help meet provisions for housing which are required, yet are unheard in its delivery.
The low value of the pound also means that foreign investment will continue, as investors try to make the most of the low exchange rates, and buy up as much property as possible, with the expectation that the pound will regain its value in the medium to long term, creating good profit returns on investment.
The vote for Donald Trump as US President has only reaffirmed the trend for "populist" politics is something that is taking place globally, and the UK's vote was not a herring vote. This has informed our industry that the global world as we know (knew) it is changing, rash decisions are not being made, it is a worldwide movement, and therefore, industries must adapt, evolve and grow in line with this new way of thinking, but should not be discouraged or deflated. Business must continue.
So, if you think you are having issues, stop and take a breath; this is happening all over the western world, and you must adapt and innovate to ensure you can sustain the culture shift. Maybe think about why these proclamations have been made and now steer power and political direction. Can you adapt and make it work for everyone whose voice was once silent, yet is now ever so clear? Everything in business and in life is no longer black and white. Now the complexities of grey areas have materialised, we should investigate these and understand the root of their causes, so that we can create a better world, particularly speaking from the Architect's position, with better designs, inclusion of spaces, and users, and within a society where everyone is requested to speak up, and they are heard.Suggest a correction