Issue 257 | 30 November 2020 - Turner & Townsend alinea

Economic Week In Review | Issue 257 | 30 November 2020

Construction and property news

Europe’s warehouses are reportedly full because of Christmas, coronavirus, and fears of a no-deal Brexit. E-commerce in 2020 had already put pressure on storage facilities.
Offshore wind | A funding deal was achieved for the world’s biggest offshore wind farm, in the North Sea. Total capital expenditure will be £3bn and is expected to begin in 2022.

Brexit

Last negotiations? | Face-to-face negotiations between the EU and the UK resumed on Saturday. There are just five weeks until the UK leaves the bloc with no apparent deal. In this round of negotiations, the EU has sent one of it’s most senior officials, Stephanie Riso, raising hopes that a deal may still be achieved.
Procurement portal | The government announced a new public sector procurement portal called the Find a Tender service (FTS) which will be up and running from 1st January 2021.
Brexit lorries | Plans for lorry parks in Essex and Kent have been approved. The North Weald Airfield in Essex will hold 53 HGV lorries, and Manston Airport will hold 2,000 lorries in Kent, in addition to a facility near Ashford which will hold 1,700 lorries.

Materials, stocks, and currencies

Oil | OPEC will meet virtually this week as the East/West global divide in Covid cases creates an issue for OPEC as it tries to decide whether to delay a production increase. Head of the Oxford Institute for Energy Studies, Bassam Fattouh, was quoted by Bloomberg saying “The size of the shock and the unevenness of its impacts imply a recovery process which is far from smooth”.
Global rush | According to Reuters, global stock markets have “paused” following a record-setting month spurred on by vaccine hopes and additional QE around the world. .

UK news

Vaccine news | The UK is expected to approve BioNTech and Pfizer’s Covid-19 vaccine as early as this week. The vaccine from AstraZeneca and the University of Oxford is expected to be approved ahead of the European Medicine Agency.
Job losses | A study by job posting website Indeed, has shown that London has suffered the largest fall in job openings compared to other European Cities. The number of available jobs in London has fallen by 50% in London (compared to 42% in the rest of the UK) and by 46% in Madrid. The research aligns with findings from the Bank of England.

UK Spending Review | A Brief Summary

The UK economy is set to shrink by 11.3% this year, unemployment will reach 7.5% in the spring but will not be unprecedented.
Borrowing is set to peak this year at £394bn and remains high, ending 2025/26 at £100bn.
A new £4bn Levelling Up Fund for upgrading infrastructure such as roads in England.
The creation of 10 freeports as hubs for global trade, promote regeneration and innovation.
A £7.1bn National Homebuilding Fund was announced, however this is largely composed of previous funds.
A new UK Infrastructure Bank will be based in the north of England and will replace the European Infrastructure Bank.

Global news

China | Factory activity in China beat forecasts in November, expanding at the fastest pace in more than three years. Growth in services also hit a multi-year high.

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	6,367.58	0.25	-13.33
FTSE 250	19,462.71	-0.23	-6.49
Nikkei	26,644.71	4.38	14.38
CSI 300	4,980.77	0.76	30.09
S&P 500	3,638.36	2.27	15.84
Nasdaq	12,205.85	2.29	40.86
CAC 40	5,598.18	1.86	-5.20
Dax	13,335.68	1.51	0.75
$ per £	1.3304	0.09	2.83
€ per £	1.1129	-0.72	-5.21
Gold £/oz	1,343.06	-4.61	18.61
Brent Oil $/barrel	48.18	7.16	-22.83

Weekly Summary

Advances towards a future Covid-19 vaccine have buoyed markets and people ahead of Christmas, but continuing restrictions, uncertainty over the impact of a Christmas relaxation, as well as Brexit cast something of a cloud on the horizon.

As we enter into the final weeks of the Transition Period and still with no deal, there are significant concerns over the movement of goods across the UK border. A test of no-deal systems by France’s Police Aux Frontières (Border Police), caused a five-mile tailback along the M20 in Kent, as the new immigration scheme means lorry drivers have to present passports, proof of means, destination, and length of stay. The process takes 70 seconds per passenger.

Announcements of lorry parks of significant size in Kent, compared to much smaller ones elsewhere could suggest that the pressure at other ports might be less.

The Chancellor’s Spending Review contained some silver linings: investment in infrastructure, housebuilding, and net-zero carbon. However, it also held some troubling messages about the UK economy and a warning that no deal could impact the UK’s growth for the next five years, and that the UK would have to find ways to pay down the Covid debt.