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Economic Week In Review | Issue 304 | 1 November 2021

Product availability

The Construction Leadership Council’s Product Availability Working Group’s latest update concluded that there are a number of issues, mostly related to logistics and energy prices, affecting construction material availability and costs at the moment and they are part of a “wider, global complex set of difficulties”. Some of the key headlines:

  • HGV drivers a key concern, unlikely to improve before Q1 2022 at the earliest “there are no immediate solutions”.
  • UK ports continue to struggle.
  • High gas and electricity costs and associated carbon costs, which are impacting both UK and overseas ‘heavy-side’ manufacturers, will soon lead to significant price increases for ceramic products, glass, steel, and bricks.
  • Cement supply is steady but prices are expected to increase in the next few months because of higher energy prices
  • Brick manufacturing is at maximum capacity, with some brickmakers investing in expansion, but this will not come on stream for some time. Exceptional demand has depleted current stocks and imports are bridging the gap. Extended lead times are likely to continue at least until the second half of next year
  • Roof tiles have seen high demand which has stopped stocks from being replenished, but manufacturing is at full capacity
  • Timber is becoming more readily available and the price has fallen for some products
  • Sanitaryware imported from Asia is subject to disruption in shipping, which is unlikely to be fully resolved until 2023 as additional containers are expected
  • Paint and coatings products continue to be affected by global raw material shortages and supply chain issues resulting in increased lead times for some products as well as rising prices

Materials and commodities

  • Steel | US President Biden has removed tariffs on EU steel which were imposed by the Trump administration. However, the new deal does not cover exports from the UK. According to UK Steel, since the tariffs came into force in 2018, British steel exports to the US have almost halved.

UK construction and property news

  • National Infrastructure Commission has had its role redefined to include affordability, biodiversity loss, and carbon emissions in its assessments of UK infrastructure needs.
  • Crossrail | MPs in the Public Account Committee have warned that there is no real certainty on the cost or schedule of the Elizabeth Line and that in order to bring greater cost certainty, Crossrail Ltd has been told to wrap up its expensive Tier 1 contracts as a matter of urgency.
  • Levelling up | The government revealed the full list of regional projects in the first tranche of funding, worth £1.7bn for projects from its £4.8bn levelling up fund.
  • Commercial investment levels are forecast to reach £50bn by the end of the year according to Savills, close to 2019’s £53.6bn.

Global news

  • Skyscrapers in China | The Ministry of Housing and Urban-Rural Development and the Ministry of Emergency Management have said that cities with fewer than three million residents will be restricted from building skyscrapers taller than 150 metres (492 ft). The move will affect 12 of China’s 50 cities.
  • Eurozone inflation reached a 13-year high of 4.1%, a significant increase from the 3.4% measured last month.

UK news

  • Budget | The Chancellor’s Budget came with a mixed reaction from the industry as it combined previously announced funds and additional funding such as that for brownfield housing sites and £1.5bn additional funding for transport outside of London. The government’s continued commitment to future construction and infrastructure projects should be welcomed.
  • Nuclear funding | The government is to overhaul funding regimes for nuclear plants. The new laws would allow for a switch to a Thames Tideway-type financing system, whereby some of the project’s risks are shouldered earlier on by consumers and will lower the cost of capital by increasing the number of private investors like British pension funds, insurers, and other institutional investors. It is hoped that the change will encourage more nuclear power stations.
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 7,237.57 0.46 29.77
FTSE 250 23,106.61 0.76 34.23
Nikkei 29,570.13 2.66 28.69
CSI 300 4,908.77 -1.03 4.55
S&P 500 4,605.38 1.33 40.84
Nasdaq 15,498.39 2.71 42.04
CAC 40 6,830.34 1.44 48.67
Dax 15,688.77 0.94 35.76
$ per £ 1.3693 -0.42 5.90
€ per £ 1.1853 0.28 6.77
Gold £/oz 1,302.19 -0.09 -10.23
Brent Oil $/barrel 84.38 -1.34 125.25

Weekly Summary

The CLCs latest advice on product availability is not particularly comforting, but it is perhaps reassuring to know that the supply chain isn’t affected by as many disruptions as we saw over the summer time.

Behind the big headlines of the autumn Budget was a lot of reshuffling of money, but with such an unstable year as we have just seen, any recommitment to schemes and funding is positive, but the government needs to ensure that this it is rolled out efficiently

300 editions : A lookback

Our weekly lookback through the six years of the Economic Week in Review is available on our website.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst

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