Economic Week In Review | Issue 326 | 25 April 2022
Materials, commodities and currencies
Iron ore | Rio Tinto reported lower than expected shipments of iron ore in Q1 2022 and warned of the risks from sustained high levels of inflation. In Q1 2021 it shipped 77.8m tonnes of iron ore and 71.5m tonnes in Q1 2022. Its plans to ramp up production in Western Australia were hampered by labour shortages and supply chain issues at the beginning of this year.
Steel | Increased use of reclaimed steel due to high costs and sustainability targets has encouraged the British Constructional Steelwork Association to release a new model specification for steel suppliers placing reclaimed steelwork on the market.
Sterling fell to an 18-month low against the dollar after poor economic data from the UK.
Cranes | Supply chain issues have caused Tando, the world’s largest manufacturer of mobile cranes, to suspend production between 9th May and 13th May this year in Japan, whilst other factories in Germany suspended production on some lines on 12th April.
UK construction and property news
Investment | Research from Aviva Investors reports that UK real estate is expected to offer better prospects for growth than opportunities on the continent because of “stronger GDP prospects and supportive monetary policy”, adding that “pricing in European markets is at an all-time high”.
Labour | Data from Hudson Contract shows that the cost of labour in London, East Midlands, and the Southwest reached all-time highs, whilst earnings across England and Wales as a whole grew 0.9% to match December’s all-time high. Demolition workers saw the highest increase of 8.1%. The employment contract services provider commented that there is pent-up demand for new homes and renovation projects.
Confidence | The latest RIBA Future Trends survey showed an 18-point fall in the number of London practices that expect their workloads to fall. Last month the survey showed the highest confidence levels since the beginning of the pandemic.
Infrastructure | The Chief Executive of Balfour Beatty has predicted a decade of infrastructure growth following significant government announcements and funding pots.
Tall buildings | The latest Tall Buildings Survey from New London Architecture shows that a record number of buildings above 20-storeys were granted planning permission in London last year, following a large number of applications submitted in 2018/2019. However, new starts in the city fell to the second-lowest level since 2013.
Skills | The City of London Corporation has set up a Skills for a Sustainable Skyline taskforce which will run for three years to support the Corporation’s ambitions to reach net-zero carbon emissions across operations by 2027 and net zero for the Square Mile by 2040.
Trade pacts | The Prime Minister visited India to advance talks on a UK/India trade agreement. As part of the pact, India is seeking an easier visa process for working in the UK.
Diversity | The Financial Conduct Authority has outlined new rules and diversity targets that require 40% of company boards to be female or to explain divergences.
Retail sales volumes fell 1.4% in March according to the ONS, a steeper fall than the 0.3% expected by economists. Consumer confidence, as recorded by polling firm GfK, showed that confidence has fallen below the levels in the 2008 financial crisis.
Insolvencies in the UK reached a five-year high, jumping 39% with 2,114 businesses becoming insolvent in March.
IMF forecasts | The IMF warned of “severe economic consequences for Europe” from the Russia-Ukraine war and has significantly downgraded its economic growth estimate for European economies from 4% to 3%. It also cut its global forecast from 4.4% to 3.6%.
EU transport | The European Commission, together with the International Energy Agency has advised citizens to work at home for three days a week and travel less to reduce reliance on Russian oil and gas.
German manufacturing costs increased more than 30% last month largely due to the sector’s exposure to energy-intensive industries. However, the PMI reading for the sector showed slowing growth and lower levels of new orders.
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
As prices increase and the world looks to reduce its reliance on Russian oil and gas, there is an interesting opportunity to increase general sustainability, as shown in the recent trends in steel reuse, and energy use guidance from the European Commission.
However, the more concerning side of these pressures is their effect on confidence and growth.
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