Looking ahead

Economic Week In Review | Issue 274 6 April 2021

Property and construction news

  • Permitted Development reform | The Ministry of Housing, Communities & Local Government has decided that from August 2021 works to convert buildings from commercial use to residential will not need planning permission, subject to a size limit of 1,500sqm of floorspace. The Royal Town Planning Institute, the Royal Institute of British Architects (RIBA), the Chartered Institute of Building (CIOB) and the Royal Institution of Chartered Surveyors (RICS) have written a joint letter voicing concerns over the reforms – in particular over the permanent impact on high streets and the quality of the accommodation which will be provided.
  • PI Insurance | A survey by the CLC has shown that nearly one-third of firms have lost projects because of inadequate PI insurance. Increased premiums and stricter limits on levels of cover have left some firms unable to obtain the policy they wanted and 54% were unable to buy the level required to meet contractual terms.

Materials and commodities

  • Liberty Steel | Indebted owner of Liberty Steel, Sanjeev Gupta, has claimed that none of the plants will close “under my watch”. He is urgently seeking deals with administrators and has been declined a loan from the UK government.
  • Suez aftermath | The Suez canal has reopened following the successful refloating of the Ever Given container ship. An estimated $9.6bn-worth of goods was held up each day.
  • Cement in New Zealand | New Zealand’s only cement manufacturing plant will use up to three million used tyres (42% of the country’s annual wastage) as fuel. The Environment Minister called the plan a “win-win-win” for the environment as it reduces landfill use, reduces coal use by 15%, and without harmful effects from air discharges.

UK news

  • Insurance market | Recent natural catastrophe claims and Brexit, alongside Covid-19 claims have hit the insurance industry hard this year. Lloyds expects pandemic-related claims of £6.2bn for 2020, pushing it to a pre-tax net loss of £0.9bn.
  • Household savings | According to the ONS, the household savings ratio rose to a near-record high of 16.1% at the end of last year. It is hoped that these reserves will help fuel economic growth when businesses reopen.

Global news

  • Space requirements | The latest survey by KPMG showed that most major global companies do not intend to reduce their office space, but few expect normality to return. Only 17% of surveyed chief executives intend to scale down their offices, down from 69% last August.
  • US Spending | US President Biden has unveiled a $2tn plan to rebuild infrastructure, tackle climate change and address wealth inequality. The increased spending comes with substantial tax increases. Corporation tax would be increased from 21% to 28% (the previous administration lowered it from 35% to 21%).
  • Emerging economies | The IMF warned that emerging economies face more long-term scars from the pandemic than advanced economies, but it will be less severe than after the financial crisis.
  • China and Iran signed a 25-year partnership. Whilst details of the agreement have not been disclosed, previous drafts included cooperation on energy, nuclear power, weapons development, and the Belt and Road Initiative.
  • Covid Treaty | Dozens of countries, including Britain, France, and Germany have called for a new global pandemic treaty. The declaration calls the current pandemic “the biggest challenge to the global community since the 1940s”.
Tender Price Index

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
FTSE 100 6,737.30 -0.05 24.41
FTSE 250 21,732.67 1.14 54.14
Nikkei 29,388.87 0.73 64.92
CSI 300 5,110.78 1.44 37.64
S&P 500 4,019.87 1.14 61.53
Nasdaq 13,480.11 2.60 82.83
CAC 40 6,102.96 1.91 46.90
Dax 15,107.17 2.43 58.59
$ per £ 1.3822 0.20 13.03
€ per £ 1.1752 0.52 3.74
Gold £/oz 1,250.78 -0.45 -5.25
Brent Oil $/barrel 64.86 0.45 90.15

Weekly Summary

With restrictions across the UK being slowly unwound, and the vaccine programme continuing its success, confidence in the economy seems to be returning, which many hope will encourage spending and investment to resume.

Key concerns include the number of long-run challenges different industries are facing such as the need for business rates reform, insurance challenges (as well as a challenged insurance industry), and cost-cutting in low margin industries. This is in addition to the need to meet the demands of today’s economy. Successfully and sustainably navigating these roadblocks will be vital to unlocking the economy.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst

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