Aukett Swanke Group PLC Copy of Magazine article
29 June 2016 - 7:10PM
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Aukett Swanke Group PLC
29 June 2016
Copy of article in Building Design magazine
It is right to be concerned but now is not the time to panic
28 June 2016 | By Nicholas Thompson
Residency rules, lack of political leadership and a slowing
economy. Problems from the Brexit fallout are piling up but the
UK's world economy status will eventually pull us through, says
Aukett Swanke's Nicholas Thompson
When I wrote in our Interims on June 7, in the context of our UK
performance, that "the current slowdown may be impacted more by the
[EU] Referendum than previously thought" I wasn't really expecting
the nation to vote "Leave". However, I was expecting our share
price to fall. I got one right.
So what does this vote mean for our industry?
The first concern is with architectural colleagues who have come
to the UK from other EU countries either for experience or lack of
opportunities at home.
Either way, they are worried because there has been no precedent
in their lifetimes of such an event. By way of some comfort we have
at least 24 months, and maybe 30 months or longer, to determine new
residency rules if indeed they change at all. And, remember, we all
employ non-EU and EU nationals. At Aukett Swanke some 40% of our
staff is non-UK and, of those, three-quarters are EU nationals. We
have a shared problem to solve as it concerns highly skilled
professionals in roles that we could not fill from the UK
alone.
The political landscape is far more uncertain. The current lack
of leadership - in both major parties - is bad for business. When
the Russian government faced economic sanctions and Turkey had no
political majority, clients deferred major project work that was
already in our studios. Turkey recovered quite quickly, Russia did
not.
This is the biggest issue for our industry and we will closely
monitor new opportunities and continuing instructions over the
summer months. As a principle in our industry we follow work - we
don't create it. If the commercial markets do falter, then the
government (of the day) may have to invoke Keynesian economics and
support major projects such as HS2 and Crossrail 2, to maintain
wider employment in the construction industry - as commercial
employers have no such obligation.
The third issue is economic activity. Financial markets always
react first - property is usually well back in the queue due to the
project life cycle. Architects have some time to react but even so
not much. It is also usually the case that it is the casualties
that hit the headlines, not the projects that continue. We must not
overreact.
But what is clear is that the already slowing UK economy will
continue to level out and that may affect employment. We will all
need to re-adjust to the new activity metric. But even if GDP
actually falls the basic premise that there is an under-supply of
both housing and office space will remain. What firms should be
doing is looking abroad - as we have always done - to provide some
balance to their work portfolios. Island economics is great when
there are good times - not so when uncertainty looms.
However, I do feel confident in the UK economy, whether in or
out of Europe, as we are a world economy and our resilience has
been tested many times - we have always succeeded.
Postscript:
Nicholas Thompson is the chief executive of the country's only
listed architect, Aukett Swanke
This information is provided by RNS
The company news service from the London Stock Exchange
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