Economic Week In Review | Issue 300 | 4 October 2021
Materials and commodities
Steel increases | British Steel has added temporary surcharges totaling £30/tonne because “the costs of energy and transport continue to increase significantly” and they can no longer be absorbed. The company did note that there has been a relaxation in the cost of iron ore, but coking coal increases were an issue.
Iron ore | The rapid decline in iron ore prices (coupled with high shipping costs) has prompted many producers to pause operations.
Energy | There is a global shortage of energy caused by supply constraints at producers, for a number of reasons, which has coincided with a post-pandemic activity rebound. Reasons for reduced output include the phasing out of coal, a poor year for wind generation, and less maintenance work carried out during the pandemic.
UK construction and property news
Labour | Since the relaxation of Covid guidelines, the workforce at Hinkley Point C will be increased by a third to 8,500. During the pandemic only 1,500 people were on site.
Retail | Aldi is to build 100 stores across the UK in the next two years and is expanding its logistics infrastructure, spending £1.3bn.
Net Zero | New rules ensuring that companies working on government contracts over £5m/year have a commitment to becoming net zero by 2050 have come into force. Suppliers will have to produce a carbon reduction plan and outline measures to reduce emissions.
Housing | Data from HMRC on residential deals in August 2021 shows that more than a million transactions have taken place this year. The last time that happened was in 2007. Analysts do not expect the end of the Stamp Duty holiday to cause sales to slow dramatically.
Furlough | The employment support scheme ended last week, despite the ONS reporting that 5% of jobs were furloughed just before the deadline.
Freight | Tesco has increased its use of rail freight from Europe, from 65,000 to 90,000 containers a year. The move negates some of the HGV driver shortage and also saves 22 million road miles, producing 76% less carbon. This week the military is being brought in to maintain fuel supplies throughout the UK.
Winter Hardship Fund | The UK government announced a £500m fund for councils to help support poorer families through winter, in light of the energy crisis and reductions in other areas of support.
Jobs fund | The Chancellor will today set out plans for a £500m fund to help UK-based people find jobs in an effort to calm acute labour shortages.
Professional services has become the latest sector to warn of severe labour shortages with some firms turning work away because of a lack of staff. Research by KPMG and the Recruitment & Employment Confederation showed a sharp increase in both permanent appointments of staff and pay levels as the number of candidates fell.
China’s factory activity fell due to restrictions on energy usage and the increasing cost of input materials. Manufacturing PMI fell to 49.6 with output, new orders, employment, and new export orders all falling.
Haulage | According to consultants Transport Intelligence, Europe is short of 400,000 HGV drivers. The decline in the UK is one of the largest, with one in seven drivers leaving since 2016, whilst Romania has added the same number (50,000) of drivers in that period.
Global trade is expected to grow at its fastest pace for 11 years, increasing by 10.8% this year, according to the World Trade Organisation.
Evergrande | The distressed Chinese developer missed another repayment deadline and is to sell a half-stake in its property management arm for $5bn. Its current liabilities amount to £305bn and there are concerns over the global repercussions of its liquidity crisis. Share sales were suspended ahead of a report of a “major transaction” and reports that a rival organisation is to take a majority share.
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
Labour is becoming an issue across the industry and with unemployment still relatively low (particularly in construction), it is difficult to see who will fill the short-term gaps without proper innovation, modernisation, or in some cases better planning.
Our 300th edition!
The Economic Week in Review started in 2015, just after the “Great Fall of China”, during the miner’s crash.
Since then we’ve published a round-up of everything that we think is important for construction pricing, documenting every high and every low, for 300 weeks.
Over the next few weeks, we’ll be publishing a summary of the events we recorded; some you may have forgotten and some that were not as important as we all thought they were going to be, and others appeared with no warning and and had a dramatic impact across our industry, and in some cases across the world. We hope you enjoy reminiscing!
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