We are now several weeks past the Brexit vote and the impacts of the decision are starting to be felt and understood by businesses up and down the UK, writes Sahel Majali.

Consumer focus

Many consumer-focused businesses seem to have been minimally impacted, with few people changing their day-to-day routines and purchasing.  There have been few particularly negative reports from the major retailers since Brexit, although many are sighting uncertainty in forecasts (which are a lovely fall back for Chief Executives with shareholders to please).

Those businesses that are more discretionary in their nature, such as travel, car sales and house building have seen a subtle slow down, but no wholesale stop.  These were the areas that were of most concern, as they represent a large proportion of GDP and represent many well paid jobs.

So far so good then?

Well, maybe.

Many major investors are nervous, which means that they may put current decisions on hold, such as starting a new housing development or building a new retail park.  This has a longer term impact as it can create a fall in the economy in six months to a year’s time, when that new investment would have led on from an existing opportunity that is due to finish.

At the same time, the dramatic fall in the value of the pound has seen projects become significantly cheaper to fund for overseas investors.  Those that are confident that, in time, the pound will bounce back, can see a potential 20% uplift on currency valuation alone.

I wrote in my previous column how UK businesses would need to be prepared following the Brexit vote and how negotiations were key. The main effects will be felt moving forwards, particularly in UK construction.

Impact for UK construction

Longer term investments, such as student accommodation and private rental accommodation are continuing on at great pace as the fundamental, underlying demand still exists.

Larger, mid-market residential developments continue as again, the fundamental demand for new homes is still there.

High-profile, marquee projects appear to be slowing down as they require a number of different investors, many of whom have different demands and requirements, few of whom tolerate uncertainty.  The outlook for these is somewhat chilled at the moment.

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