The only way is up?

Economic Week In Review | Issue 325 | 19 April 2022

Materials and shipping

  • Shipping backlogs | Analysis by Asset Alliance Group suggests that it could take UK ports until 2025 to get back to pre-pandemic levels and clear the backlogs following a period of rising costs, bottlenecks, driver shortages, and Brexit delays. It expects delays to continue this year due to labour disputes and logistical issues.

UK construction and property news

  • Building safety | Michael Gove wrote to the Construction Products Association committing to use “significant commercial and reputational consequences” for firms who have not committed to paying for post-Grenfell safety measures on their buildings. Talks with the CPA have collapsed after the minister said the industry was “coming up with excuses to do nothing slowly”.
  • Bat tunnel | Procurement has begun for a £40m bat protection tunnel along a stretch of the HS2 route. It will protect a rare species of bats in a Site of Special Scientific Interest near the line. The tunnels are designed to baffle the noise from changing air pressure as high speed trains enter tunnels.
  • Construction A Level | The Chartered Institute of Northern Ireland has called for the creation of a Construction A Level.
  • Build to rent | Analysis from the British Property Federation shows that the number of build to rent homes has increased by 19% in the last year. The size of schemes is increasing; completed schemes contained an average of 140 units, while those under construction average 243, and ones in planning are larger still, at 308 units.
  • Inflation | The National Buying Group, an alliance for independent builders’ merchants, is urging suppliers to restrict price movements to only necessary increases and that there needs to be “realism” in pricing negotiations. It warned that unless the impact is spread fairly, the market could collapse.

UK economy

  • Inflation in consumer prices reached a 30-year high of 7% in March. An economist at Goldman Sachs has suggested that inflation will affect real incomes in the UK harder than those in Europe because of differences in energy regulations and buying patterns.
  • Pay | According to a survey by the Chartered Management Institute, employers in Britain are offering annual pay increases of 2.8%, below the rate of inflation. Feedback in the survey raised concerns that consumer demand will soon falter.

Global economy

  • IMF | Global growth forecasts have been downgraded due to the crisis in Ukraine and inflation concerns.
  • Worker shortage | Construction employers in the US have reported a shortage of workers even though employment in the sector has exceeded pre-pandemic levels in 32 states.
  • China has unveiled measures to support the economy after data showed that consumer activity was lagging. It announced 23 measures that encourage financial institutions to support local government infrastructure projects and the struggling property sector and to provide financial services to affected industries. Standard Chartered lowered its forecast for economic growth in China in Q2 to 3.5% (previously 5%) whilst Barclays lowered its full-year estimate to 4.3%. The Chinese government has set a target of 5.5%, its lowest in three decades.
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 7,616.38 -0.69 8.50
FTSE 250 21,121.61 -0.25 -6.22
Nikkei 27,093.19 0.40 -8.73
CSI 300 4,188.75 -99.00 -15.65
S&P 500 4,392.59 -2.13 4.95
Nasdaq 13,351.08 -2.63 -4.99
CAC 40 6,589.35 0.63 4.81
Dax 14,163.85 -0.84 -8.38
$ per £ 1.3061 0.24 -5.53
€ per £ 1.2084 0.85 4.70
Gold £/oz 1,514.68 1.38 17.95
Brent Oil $/barrel 111.70 8.68 67.29

Weekly Summary

News that import delays and problems are likely to be part of the new normal will not be welcomed in a time where many are struggling to keep a cap on the current rate of inflation. Along with other news, this should place more emphasis on the idea of teamwork and should encourage teams to take a holistic view across a project to see how to manage issues and be an active part in understanding a problem and finding a fair solution.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst

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