Economic Week In Review | Issue 323 | 4 April 2022
Materials and commodities
Availability | The CLC issued its latest product availability statement noting that DIY demand was softening, but this was offset by higher trade demand. Stock replenishment was less of an issue than in previous updates but price inflation was a major concern, largely driven by the volatility of energy prices.
Nickel | The Financial Conduct Authority and the Bank of England has launched an investigation into the suspension of nickel trading by the London Metal Exchange last month. The review aims to “determine whether any lessons might be learned in relation to its governance and risk management”.
Batteries | The increasing price of nickel, lithium, and cobalt has increased the cost of battery production. Increasing global demand was already putting pressure on the key ingredients and the war in Ukraine has increased the intensity. According to battery group Farasis Energy, the price of the three key metals for a 60kWh battery has increased from $1,395 a year ago to $7,400 in March.
Shipping | Ukrainian and Russian nationals account for 15% of the global shipping workforce. Concerns are increasing that as President Zelensky calls for all Ukrainians to return to fight, a severe shortage in workers could become apparent.
UK construction and property news
Demand | According to Knight Frank, law firms took more than a quarter of all space leased in the City of London last year, focussing on sustainable office space of a high specification. 1.1m sqft of space was leased to office firms last year, reaching a new high since the Brexit referendum of 2016, 85% up on 2019’s total.
Fixity | Reports from the Construction Products Association and the Builders’ Merchants Federation show that some contractors are only holding prices for 24 hours as a result of increasing energy costs. The trade bodies have a joint task force to monitor the issues and are now meeting every three weeks.
Pay | Workers have walked out at the Hinkley Point C construction site because of a dispute over bonuses and working arrangements. EDF has recently announced new delays and cost overruns at the project.
Amazon property announced a £250m real estate fund called Amazon Capital which will focus on funding or entering JVs for warehouse space, care homes, and real estate infrastructure for life sciences.
Return to the office | The latest data from the ONS shows that British employers are warning of fast-rising levels of staff absences because of the latest Covid wave. Manufacturing body, Make UK, said that cases are now higher than at any time during the pandemic.
Covid loans | The UK government is in talks with British banks to provide a permanent replacement to the various business support schemes set up throughout the pandemic. The new schemes are expected to cater for SMEs that would otherwise struggle to gain funding with affordable terms.
Finance jobs | More than 7,000 finance jobs have been moved from London to the EU because of Brexit, according to EY in its latest Brexit Tracker.
Footfall in Oxford Street is lagging behind pre-pandemic levels and is currently 46% lower. Overall high street footfall is 23% lower, according to analysis at RSM.
Energy | Ofgem has provisionally approved the first of two subsea power lines which will connect Peterhead in northeast Scotland to areas of demand in England. The project currently has a total investment of £2.1bn and the first 2GW link is expected to see work start in summer 2024.
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
At the beginning of the pandemic, the construction industry collaborated to help projects navigate an unprecedented level of uncertainty. With price shocks affecting an increasing number of materials and components, we hope that the industry can collaborate again to ensure that solutions can be found to minimise the impact and keep projects moving forwards.
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