Economic Week In Review | Issue 324 | 11 April 2022
Materials, commodities, and goods
Alumina | Rio Tinto has taken full control of an Australian refinery that was previously jointly owned with Russian aluminium producer Rusal.
Oil | Cambo oilfield near the Shetland Islands may be developed after a corporate takeover. The oilfield could deliver up to 170m barrels of oil during its 25-year operational life.
Shipping | The cost of insuring shipping through the Black Sea has increased 10%, surpassing the cost of chartering a ship.
British Steel announced a £100/tonne increase on structural sections for all new orders, with immediate effect. It cited the “sustained high level of steelmaking costs” and “continued disruption in international trade flows”.
UK construction and property news
Infrastructure | The government’s energy security strategy announced the intention to build eight new nuclear power stations. It also aims to speed up planning, aiming to approve a scheme each year to 2030. If they are ready in time, the Small Modular Reactors from Rolls Royce will form a vital part of the plans. Recent changes to funding regulations have made it easier and quicker to fund, and therefore build, nuclear plants.
Green skills | The City of London Corporation has established a Skills for a Sustainable Skyline taskforce. The taskforce comes three years after a poll found that 90% of surveyed industry professionals feared a growing green skills gap.
Administration | The collapse of Midas Construction has revealed that nearly £70m is being claimed by creditors with more than 1,500 of them likely to receive no cash. Unsecured creditors have lodged claims for £51.2m but only £3.3m of assets are expected to be realised to pay them.
Logistics | CBRE reported that the take-up of logistics space in the UK doubled at the beginning of the year. The number of deals also increased by 64%. The M1 corridor remains the most popular location.
PMI | Construction PMI saw the fastest increase in new orders since August 2021, but business optimism fell to a 17-month low. The index registered 59.1 in March, unchanged from February.
Output | ONS data shows that overall output fell 0.1% in February as strong storms caused work to pause on site. In new work, infrastructure and public housing saw the largest reductions in output.
Brexit | HMRC has reported “ongoing issues” with the new post-Brexit border system and expects it to be out of action for at least a few more days. This adds to the disruption at the port of Dover, which is already facing 20 mile-long queues of trucks after P&O suspended all sailings.
Wages | Starting salaries in the UK have risen at their fastest rate since 1997 according to the Recruitment and Employment Confederation. It also reported that a scarcity of candidates for jobs has meant that employers have to be more creative in their offers and need to broaden their search.
Electric cars | The government has suggested that half of all new cars should be electric by 2028. It also announced specific annual goals including a 22% mandated all-electric share by manufacturer, rising to 80% by 2030.
Food | World food prices reached a record high in March, increasing at the fastest monthly rate in 14 years according to the UN’s food price index. Reduced output from Russia and Ukraine has increased the index by 34% on an annual basis. The World Bank has warned of lasting damage to low and middle-income countries.
Canada | A new raft of measures have been introduced to try and increase the affordability of the housing market. Blind purchases by foreign buyers will be banned for two years and speculators will pay a higher rate of tax. It also aims to double the rate of home building over the next decade.
Emerging markets | Fund managers have faced worsening outflows as investors manage rate cuts and worsening geopolitical risks.
World Bank | Ukraine’s economy is expected to shrink by 45% this year, and Russia’s by 11%. The group of Emerging and Developing Economies will see a fall of 4.1% in 2022, twice the fall seen during the pandemic.
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
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Brent Oil $/barrel
Increasing costs are beginning to weigh on a number of industries which were already challenged as they headed into the current crisis. Understanding these increased costs and how they impact you (and your supply chain) is vital at the moment, as is working together to develop a mitigation strategy through the current period of uncertainty.
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