Economic Week In Review | Issue 258 | 7 December 2020
Crossrail received a loan of £825m to stop the scheme from being scrapped. Governance of the scheme was transferred to TfL in October who revealed that non-essential parts of the project may be “parked”.
Thames Tideway completed its longest single tunnel drive, meaning that more than 19km of the sewer has now been completed. Spoil from the 7.6km dig from Battersea to Bermondsey was removed via barge, omitting the use of 250,000 HGVs.
Network Rail has had its upgrades pipeline cut by £1bn, down from £10.4bn, according to the rail minister.
Property and construction news
UBS announced plans to vacate its 1 Golden Lane office with staff being relocated to its main headquarters at 5 Broadgate or working from home.
Demand | IHS Markit’s latest PMI showed an improvement to 54.7 from 53.1, buoyed by the residential market which is supported by the relaxation in stamp duty and an increase in lockdown home improvements.
Vacant space | Several large high street chains collapsed into administration this week with analysts warning that the high street is now a teetering “house of cards”. Estate Gazette warned that the liquidation of Debenhams and the administration of the Arcadia Group could bring 16.5m sqft of space back to the market.
VAT-free shopping | The High Court has dismissed claims that the UK government has not considered the “devastating impact” of removing tax-free shopping for tourists. Selfridges, Chanel, and Bicester Village warned that ending the scheme could lose £1bn in spending. The scheme needs to be removed as under no-deal guidelines, tax-free shopping would have to apply to all travellers, not just those from outside of the EU.
Footfall increased 85% week-on-week as non-essential retail stores reopened in England. Shopping centre footfall rose 133% and 29.5% in retail parks, just 3.1% lower than the same time last year.
Materials, stocks, and currencies
Vaccine booster | The FTSE 100 reached a nine month high as investors hope that 2021 will bring better economic times, supported by optimism that Covid-19 vaccines will roll out soon. An initial 400,000 people will receive the vaccine this week in the UK.
Oil rose to its highest price since March as Opec+ agreed to cautiously increase output, following nine months of cuts, easing fears of an oversupply.
Port delays | The Builders Merchants Federation has said that ports are becoming a “major issue” for members. Problems at Felixstowe have impacted other ports to create delays, partial unloading of ships, and diverted shipments. The director general of the British International Freight Association, said that within 10 weeks logistics firms went from having no work to a situation where almost no ships were available, and the flow of empty containers was disrupted, reducing the supply.
Low paid workers | The government aims to ban exclusivity clauses in employment contracts with a weekly income of below £120/week, allowing low-paid workers to take on additional jobs. It is thought the move will help 1.8 million workers.
Executive queue | A waiver to quarantine rules for “high-value” executives entering England will be implemented from 15th December. In general, a 14-day isolation is required, reduced to 5 days if someone pays for a Covid-19 test. Previous waivers covered seasonal fruit pickers, the armed forces, and technical staff for utility companies.
US stimulus | A $908bn coronavirus stimulus bill has been proposed in America aims to break the deadlock on fiscal stimulus. Previous stimulus negotiations faltered in November.
German factory orders have bounced back above pre-pandemic levels according to figures from Destatis. Orders increased 2.9% month-on-month beating expectations of a 1.5% increase.
Hong Kong | The UK has granted 216,398 passports to Hong Kong nationals (or five every minute) raising concerns of an exodus.
Published every six months, our Tender Price Index is an analysis of inflation price deviation in construction prices. Click on the link above to view our most recent Index.
Friday to Friday
Price / Index
Week % change
Annual % change
$ per £
€ per £
Brent Oil $/barrel
Construction and real estate were top of the headlines this week following the collapse of several large retailers leading to significant concerns over future unemployment figures as well as empty units on high streets and in shopping centres. Infrastructure was also high on the agenda for the week with large sums of money being committed or uncommitted. With such uncertainty surrounding the future use of, and demand for property these infrastructure schemes could be considered key to ensuring pipeline and cashflow in the industry.
The other focus of the week was Brexit as Michel Barnier ended the talks saying that “significant divergences” still exist and that the “conditions for an agreement are not met”. Over the weekend further talks commenced in which it was reported that “a major breakthrough” had been achieved on fishing rights but the talks now hang on a “ratchet clause” under which the UK would have to follow the EU’s environmental, social, and labour standards as they are developed or face tariffs.
With just 24 days until the end of the Transition Period, the talks are set to go down to the wire, leaving many in a state of suspended animation as they wait to understand the deal.
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