Issue 263 | 18 January 2021 - Turner & Townsend alinea

Economic Week In Review | Issue 263 | 18 January 2021

Property and construction news

Construction output | Total output has recovered to pre-pandemic levels, growing 1.9% month-on-month, and a 3.5% increase in new work. Infrastructure continues to be the main growth sector.
IR35 | Ahead of changes due to come into effect on 6th April, HMRC is running a series of free online workshops for construction companies.
House prices fell 0.9% in January in order to speed up sales before the end of the Stamp Duty holiday. However, prices remain 6% higher compared to a year ago.
Transport and Covid | An emergency summit took place last week to respond to government concerns on the overcrowding of public transport. The CLC has suggested that sites push start times to 10am and avoid using public transport, particularly between 5:45 and 8:45am, warning that if public transport usage does not reduce, the government may impose restrictions on construction. TfL is going to feed passenger numbers through to the CLC.

Materials, stocks, and currencies

Oil prices trended downwards due to a strengthening dollar and as China announced new lockdowns following new cases. Two cities with more than 22 million people were placed under lockdown, with over 17 million tested over a few days.
Steel | British Steel announced its fifth price increase since July for structural steel, blaming sharp increases in the cost of raw materials, and scrap availability. Fabricators and contractors have warned of increases to prices too.

UK news

Economy | The latest data shows that the UK economy shrank in November after six months of growth. Output fell 2.6% compared to October and 8.5% lower than before the pandemic. Economists had expected a fall of 5.7%.
Insurance | The Supreme Court has ruled that insurance policies should pay out losses caused due to Covid-19 and lockdown measures. The case was brought by the Financial Conduct Authority on behalf of 370,000 policyholders who had previously been told by the High Court that most claims should not be paid.
Fresh Dover challenges | Rapid lateral flow tests are not a valid Covid-19 test to enter France from outside of the EU.
Finance vacancies fell 49% in 2020 as Brexit and Covid lowered job prospects, data from recruitment firm Morgan McKinley. Openings have been falling consistently since 2015.
Foreign nationals | A report by the Economic Statistics Centre of Excellence has estimated that between Q3 2019 and Q3 2020, 1.3m people born aboard left the UK, with 700,000 leaving London, which equates to an 8% drop in the capital’s population. It is thought that this exodus has helped to mask unemployment figures in the UK.

Global news

US relief plan | President Elect Joe Biden announced plans to kick-start the economy with a $1.9tn stimulus package and plans to distribute 100 million Covid-19 vaccines in the first 100 days.
Growth in China | GDP in China grew 6.5% in Q4 2020, a faster rate than at the beginning of the year, before the pandemic. Its full annual growth was 2.3%, driven by industrial production.

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	6,735.71	-2.00	-12.23
FTSE 250	20,615.59	-2.13	-5.81
Nikkei	28,519.18	1.35	18.63
CSI 300	5,458.08	-0.68	31.37
S&P 500	3,768.25	-1.48	13.19
Nasdaq	13.00	-1.54	38.44
CAC 40	5,611.69	-1.67	-8.02
Dax	13,787.73	-1.86	1.93
$ per £	1.3599	0.11	4.38
€ per £	1.1224	1.26	-4.43
Gold £/oz	1,345.79	-1.27	12.43
Brent Oil $/barrel	55.10	-1.59	-15.03

Weekly Summary

A couple of weeks into the new EU relationship, and nearly a year on from the start of the Covid-19 pandemic, we are now beginning to see how the economy and the construction sector have been impacted and how a recovery might look.

It is encouraging to see that construction output has recovered the losses seen throughout the pandemic, but there is still some way to go for the industry to get back to full health.

It is also clear that significant headwinds still exist with concerns around the sustainability of growth, raw material prices, and a weakening jobs market, in addition to the threat from new variants of Covid-19.

For construction, it is crucial that in the next few days we can demonstrably continue to work and operate in a safe manner, not just on-site, but in all activities related to the project.