Product availability | The latest update from the CLC suggests that materials are more available than in recent weeks, but costs have increased an average of 23% this year. It also added that demand is expected to remain positive for the second half of 2022.
Copper prices fell below $8,000/tonne after peaking at $10,600 earlier this year as many investors expect a slowdown at the end of the year despite increasing factory activity in China.
Steel import tariffs in the UK will be extended for two years to protect British steelmakers. The UK’s International Trade Secretary admitted that the move “departs from our international obligations” in a WTO agreement.
Shipping | Trans-Pacific shipping volumes and inquiries have edged down and “spot market space is ample out of China” according to analysts. Pockets of vessel space have opened up and the unlocking of China’s cities has not caused the rebound in demand that was expected.
US Markets | The S&P 500 saw its steepest half-year drop this year since 1970, falling 20.6% in the first six months of the year. Increasing interest rates and inflation have spooked investors.
UK construction and property
Project starts | Glenigan’s tracker shows a 9% increase in UK project starts, but a 5% fall in the value of construction. Major projects (>£100m) have fallen 32% in the three months to May 2022 and 31% compared to the same period in 2021.
Infrastructure | Thames Water has increased its infrastructure spending forecasts by 20%. Its board approved an £11.5bn business plan, representing an increased spend of £1.9bn to March 2025.
Pay | CIJC has agreed a 5% pay increase for site workers, which commences on Monday 25th July 2022.
Continuity | Research by Mail Manager revealed that one in three firms lose important project information due to staff turnover and business are concerned over their ability to defend themselves should a dispute occur.
Skills | The Corporation of London’s Skills for a Sustainable Skyline Taskforce will meet this week to discuss an engagement campaign to upskill the current workforce and attract new candidates. The Taskforce was created in recognition of the significant skills gap in construction, particularly around retrofit and low-carbon.
Eurozone inflation reached 8.6% as the European Central Bank prepared for its first rate increase in 11 years.
Investment | Pension schemes in the UK are under unprecedented liquidity strains according to industry analysts. An increasing number of schemes have had to sell liquid assets to raise cash to maintain long-term plans.
Shop prices are 3.1% higher than this time last year, led by fresh food prices, according to BRC-NielsenIQ shop price increase.
Price increases | The latest quarterly survey by the British Chamber of Commerce (BCC) showed that 75% of firms had no plans to increase investment and 25% predict a fall in profits and most planned to pass on higher costs. The Director General of the BCC warned that “The red lights on our economic dashboard are starting to flash”.
Nuclear | Rolls-Royce has revealed a site shortlist for its first small nuclear reactor factory. Earlier in the year, the company asked some of England’s regional development bodies and the Welsh government to pitch for sites.
Trade | The UK’s trade performance fell to its lowest level since records began. Its current account deficit was 8.3% of GDP in Q1 2022, a significant deterioration from the 2.6% seen in 2021. It was the worst figure seen since records began in 1955.
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.
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The British Chamber of Commerce’s warning that red lights are beginning to flash on its economic dashboard will resonate with the construction industry which has endured confidence, cashflow and supply chain issues for some time.
The welcome news is that material supply chains have been restored and products are currently more available, however, that they have settled at a higher price will continue to create challenges.
Innovative solutions to modern problems need to be seriously considered to drive down future costs and ensure that cost constraints do not detract from sustainability aspirations.
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