What next for labour?

Economic Week In Review | Issue 284 | 14 June 2021

Materials

  • Low carbon | SigmaRoc will be the UK’s first precast supplier to decarbonise all its concrete products as it switches all product lines to ultra-low carbon cement-free alternatives at the start of next year.
  • Builders Merchants | Travis Perkins has warned that 40% of depots do not have enough cement or plasterboard to supply customers. It has increased prices by 15% for bagged cements, 5% for paint, and 10% for chipboard.
  • Oil | According to the International Energy Agency, global oil demand is expected to return to pre-Covid levels by the end of 2022. Brent oil prices have hit the highest level since April 2019.
  • Timber | The Timber Trade Federation announced that demand for timber and panel products in Q1 2021 was at its highest since 2007, and echoed Travis Perkins’ COO, Frank Elkins, in his advice to plan ahead to avoid gaps in supply.
  • Safety marks | The Construction Leadership Council continues to warn that the industry may fall foul of changes to safety certification rules. Radiators, adhesives and high specification glass could be withdrawn due to a lack of market testing is the UK government does not extend the transition period from EU testing and CE markings to a new British system. Currently, both markings can be used until 31st December 2021.

Property and construction news

  • Output | Data from the ONS showed that all work levels dipped slightly in April, after strong increases in February and March. Figures continue to be dominated by Repair and Maintenance, whilst New Work continues to be led by infrastructure.
  • Labour | The latest CITB Construction Skills Network forecasts have been increased to show that an extra 217,000 workers will be needed by 2025 due to a faster than expected bounce-back from Covid-19.
  • Skills | Plans to “de-skill” electrical operatives by introducing a new grade at Hinkley Point C have been permanently abandoned.
  • Pipeline | Glenigan’s latest data shows that infrastructure work dominated contract awards in May, accounting for a quarter of new contracts. £1.13bn of infrastructure work was handed out.
  • River Thames Scheme | The government has approved the business case for a new £501m flood alleviation scheme.
  • Retail voids in Oxford Street currently stand at 17% according to research by Property Week, as a result of e-commerce and the pandemic. The New West End Company suggests that the “proper” void rate is closer to 9% as 10% of units are being redeveloped or reoccupied and that £4bn of redevelopment is set to happen over the next three years, highlighting continued confidence in the area.
  • Housebuilders code of practice | A draft publication has been issued for a four-week consultation. It introduces requirements for after-care services to deal with snagging and a “robust” complaints process.
  • Build back better | 30 towns will share a £725m fund to build back better. The money is targeted at reinvigorating neglected or underused buildings, creating space for businesses, community events, or housing.

UK news

  • Manufacturing | Growth in the UK’s manufacturing sector is expected to be twice as fast in 2021 as was forecast at the beginning of the year according to Make UK. The forecast has been upgraded from 3.9 to 7.8%. However, the group also highlights to danger of rapidly rising input costs and negative margins.
  • Selfridges sale | Plans are being considered for a possible >£4bn sale of the department store by the Weston Family.
  • Reopening the pound | The Prime Minister will announce later today whether further unlocking of Covid-restrictions will be delayed beyond 21st June. The uncertainty has not affected the pound which is nearing levels last seen against the US dollar before the Brexit vote in 2016.
  • Return to the office | A study by the Centre for Cities has found that the five-day week could return within two years as workers seek out the benefits of working together such as interactions with others, developing ideas and knowledge sharing.
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 7,134.06 0.92 16.85
FTSE 250 22,734.13 -0.43 33.12
Nikkei 28,948.73 0.02 29.78
CSI 300 5,224.70 -0.62 30.52
S&P 500 4,247.44 0.41 39.66
Nasdaq 14,069.42 1.85 46.73
CAC 40 6,600.66 1.30 36.40
Dax 15,693.27 0.00 31.33
$ per £ 1.4112 -0.43 12.66
€ per £ 1.1664 0.15 4.78
Gold £/oz 1,330.66 -0.40 -3.59
Brent Oil $/barrel 72.69 1.11 87.68

Weekly Summary

Much of the economy is recovering near to pre-pandemic levels, or are forecast to in the next few quarters. Whilst this good news should be encouraging, we should be mindful of the UK’s pre-existing skills crisis and that as activity returns, it could be exacerbated by the extent to which people have repatriated due to Covid and Brexit.

The silver lining could be that large improvements have been made to productivity on-site over the last year, and so when social distancing requirements are removed, we could benefit from a higher rate of general productivity. Yet, we cannot count on this, and the industry should fully engage with the positive work started by the CLC and CITB a few months ago in the Plan for Skills.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst

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