The Brexit could be an example of not so well informed incompetent voters taking a decision. Politicians should have talked about the fact that Europe had no war for the last 70 years and that the foundation of the EU is definitely one key factor for that. I see the UK falling into pieces (at least Scotland will part) and England will not play a major role in the world in the future. Will it affect the cleaning industry, not really. Probably more English companies will look for opportunities abroad so we might see some more FM companies coming to India. India will not be affected much through the Brexit; only more Indian companies will invest in the EU and not in the UK anymore.
With the Brexit, the companies in the UK would be looking at establishing themselves better than before. The local economy would go through the initial stress and the market is down. They would look for opportunities abroad for growth. Hence, I would expect the customer base in India to grow with more entries. The influx of companies in our field, according to me, would increase and the market in India will probably again see the activities picking up. The market forces in terms of customers demanding more organised players and also for associations from the European market and the UK market.
Brexit has taken the world by a bit of a surprise, but as far as its impact on Indian Cleaning industry goes, we would expect the effects to be minimal. The cleaning industry in India is largely self-sufficient and manpower driven – this makes it fairly immune to any groundbreaking impact.
However, there will be an indirect effect – facility management companies working with auto manufacturers or others in the manufacturing segment that had significant UK/ EU ties, may feel the brunt and that may have an impact on that sector. Clients that have a large volume of their businesses from exports and imports will also be affected – and any adverse impact leads to cost cutting. I would actually see this as an opportunity for them to look at an outsourced model for facility management and cleaning.
The changes in currency rates would also impact the cleaning industry players that are sourcing equipment or chemicals from UK/ EU. However, I do believe over the medium to long term when the dust settles, the cleaning industry will continue to grow.
Brexit will be a case study for other countries to decide own fate. However, I don’t see an immediate & escalating impact within 6-12 months as UK government will have to fence properly the transition to new identity. Direct & indirect impact will depend on the independent regulations adopted post Brexit and this will further decide the inflation of the country. Migration remained a problem for the UK but this is a bit of “blessing in disguise” as most (three in four jobs are filled by migrants) lower scale jobs have been filled by migrants only. Indirectly the UK people will be looking for job security. Cleaning industry may see a bit of drop in investment. If free movement to EU are curbed there will be a drop in lower skilled resources to increasing the cost.