Economic Week In Review | Issue 315 | 7 February 2022
Materials, goods and products
Shipping | The Baltic Dry Index which indexes the cost of shipping dry goods around the world has seen a steep fall back to more normal levels, having increased nearly 400% since the end of 2020.
Machinery | An auction of used construction plant showed the level of demand for machinery, with some three or four-year-old telehandlers and mini-excavators achieving nearly new prices.
Mineral products | Demand for mineral products saw double-digit growth last year according to the Mineral Products Association. However, it was not uniform across materials with aggregate and asphalt sales exceeding pre-pandemic levels, but ready-mixed concrete and mortar sales were still lower.
UK construction and property news
Labour | Construction unions have submitted a plan to increase site wages by 10% under the Construction Industry Joint Council (CIJC) agreement, which will set a minimum wage for more than 500,000 workers. It wants to see all workers’ pay move up by a uniform pay increase. The increase is set to come into force at the end of June.
Infrastructure | Work on the “mammoth” M&E works at Hinkley Point C has been given permission to start. Fit out of the nuclear island of Unit 1 will need a workforce of up to 4,000 at its peak.
Payment terms | The latest survey by Build UK shows that contractors have improved payment times with half now paying within 30 days. This is a four day improvement within six months and 15 days quicker than when Build UK started tracking in July 2018. The improvement has been largely facilitated by the Construction Playbook.
Output | Construction’s PMI reading grew to 56.3 in January, up from 54.3 in December, with the index now showing 12 consecutive months above the crucial 50.0 mark. January’s reading was the fastest rate of growth since July 2021 and encouraged the best month for staff hiring since last October.
Part Z | A bill presented by Duncan Baker, Conservative MP for North Norfolk is passing through parliament. It would require whole-life carbon emissions from buildings to be reported. It received its first reading last week and will have a second reading on 18th March.
MMC | Senior living provider, McCarthy Stone has set a target of 50% of its schemes to be built using modular systems.
Royal Albert Dock | The £1.7bn regeneration project is reportedly on the brink of collapse unless its developers can guarantee it will be completed, according to the Sunday Times. Beijing’s Advanced Business Parks (ABP) aimed to create a 35-acre park of offices, shops, and homes but has only signed a handful of tenants and paused construction two years ago.
Accounting | PwC is being investigated by the Financial Reporting Council over its audits of construction firms.
House prices rose at their weakest pace since June, with month-on-month growth slowing to 0.3% in January from 1.1% in December.
Inflation | The Bank of England expects consumer price inflation to rise to 7.25% in April, falling back towards the target of 2% in two years’ time.
Cost of living | The energy price cap increase means that the average household will now pay an additional £700/year (and will rise further this autumn). The chancellor has warned of a cost of living crisis and has unveiled a £9bn emergency package, which critics have said is insufficient. The Food Foundation estimates that food insecurity has increased to 4.7 million adults (or 8.8% of the population).
Net zero | The Corporate Climate Responsibility Monitor report revealed that a large proportion of corporate net zero pledges will only reduce carbon emissions by 40%, and many multinational corporations have “low integrity” climate targets.
Covid debt | Concerns are increasing over heavily indebted countries in Latin America and Africa, as plans to rework the debt of countries at risk of defaulting (the Common Framework) has been stalled by problems due to a lack of coordination and clarity. Throughout the pandemic, countries that already had large debts spent large amounts of money supporting people and healthcare systems.
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
Affordability and viability will be key phrases as inflation and the cost of finance increase. There is still confidence in the market with key schemes pushing ahead, but many will be closely watching how a return to inflation will impact investor decisions, having only seen less than 5% tender inflation in total over the last five years, and a base rate which has been less than 1% since February 2009.
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.