Economic Week In Review | Issue 305 | 8 November 2021
UK construction and property news
High end housing| Prime central London housing prices increased by nearly 7% since the start of the year as overseas buyers have returned to the capital. Knight Frank reported that “the prime London property market is resuming an overdue recovery that was interrupted by the pandemic.”
Construction PMI increased to 54.6 in October, from 52.6 in September. Whilst lower than the 66.3 recorded in June, it shows that the industry is recovering from supply issues and a return of confidence.
Shortages | Roofing contractors are the lastest group to sound the alarm over labour and supply shortages. The National Federation of Roofing Contractors (NFRC) found that 77% of contractors had difficulties recruiting in the third quarter of 2021 (up from 56% six months ago) and 92% had costs increase, but only 70% have increased their tender prices.
Red flags | Real estate and construction companies are among the most at risk from insolvency according to the latest Red Flag report from Begbies Traynor.
London offices | A report by Savills suggests that London offices are underpriced when compared with other major European cities, and that leasing activity in the capital has increased.
Energy standards costs | The cost of increasing the energy standard of UK homes to the government’s targets will cost £330bn. The timescale for landlords is shorter than for homeowners, with leased homes required to reach level C or better by 2025 and 2028 for all tenancies.
Materials, commodities and currencies
Sterling had its worst week since June as the Bank of England announced that interest rates would remain stable. The pound fell to a five-week low against the euro.
Bricks | Ibstock announced plans to invest £50m in the UK’s first automated brick slip factory which will cater for off-site manufacture and produce the UK’s first net-zero carbon brick slip.
Cement producers have warned of a £15/tonne (16%) price rise, blaming high energy costs. The increase brings the annual rise to 30%.
Mineral Products | According to the latest Mineral Products Association, mineral products | Sales of aggregate, ready-mixed concrete, asphalt, and mortar were all roughly 5% lower in Q3 than in Q2. Sales of aggregate and asphalt are higher than in 2019, but ready-mixed concrete remains 7% lower, hindered by lower levels of commercial development.
Steelwork | The British Constructional Steelwork Association (BCSA) has said that the structural steel market has outperformed forecasts for last year with a speed and force that is “unprecedented”. The BCSA’s chief executive said “In 2020 the total UK consumption of structural steelwork fell by just over 20%. Even though the supply side has been problematic in terms of lead times and price increases, demand has bounced back by 18% this year. And in 2022 we expect a further rise of 6%, bring UK consumption right back to pre-Covid levels.”
US jobs | 531,000 jobs were added in the US in October, many more than expected after a slowdown in August and September.
Eurozone recovery | Retail sales in the eurozone unexpectedly fell as Covid-19 cases increased. Despite the slight fall of 0.3%, sales remain 4.4% above pre-pandemic levels.
Chinese Property | Fresh concerns have been raised as Kaisa Group became the latest developer to miss a payment to investor.
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.