Issue 265 1 February 2021 - Turner & Townsend alinea

Property and construction news

Empty space | The amount of vacant retail and office space is increasing across the UK, according to the latest survey by the RICS.
Furlough | The latest data from HMRC have shows that the number of construction staff on furlough increased by 116% in December to 193,400, but it remains much lower than the 723,600 peak seen in April. The current number represents 15% of the workforce.
Help to Buy | The Scottish government has scrapped its Help to Buy housing scheme, pointing blame at the Treasury, saying that budget cuts have “resulted in some difficult choices”.

Material concerns | The Builders Merchants Federation (BMF) has warned of supply-side issues for key materials, citing high demand, escalating shipping costs, and delays at ports. Timber, roof tiles, and WC items are all under pressure. BMF members gave reported “exceptional demand” since the March lockdown.
JCB is to recruit more than 400 assembly line workers in advance of a surge in production. The construction equipment market has rebounded sharply, after falling last year.
European stocks fell, showing the worst week since October as concerns increased over the slow roll-out of Covid-19 vaccines which could damage the economy further.
China’s steel industry | Crude steel output from China hit a record high in 2020, increasing by 5.2%, while finished steel increased by 7.7%, also to a record high. Steel is a pillar industry for China and helped push steel raw material imports to the highest level since 2005. Imports rose nearly 65% from a year earlier.

Unemployment rates | The jobless rate hit a four-year high of 5% in the three months to November. At the beginning of the pandemic, unemployment stood at 4%. However, with large numbers of the workforce currently on furlough (20% of private sector workers), there are concerns that this number could rapidly increase when government support is withdrawn.
UK carmaking | Often used as a proxy for consumer confidence, output from car plants fell by 29% and below the 1 million mark for the first time since 2009. The Society of Motor Manufacturers and Trades (SMMT) has warned that 10,000 jobs were lost last year and the end of the furlough scheme will bring many more.
Interest rates | A survey of economists showed that few expect the Bank of England to move to negative rates on Thursday. Rates currently stand at 0.1%.
Trade | The UK has applied to join the Trans-Pacific trade group – a group of countries including Australia, Canada, Japan, New Zealand, Mexico, and Peru. Whilst the countries are fast-growing and the group is large, it is very geographically separate from the UK.
Freight | Road freight between Britain and the EU has fallen by 38%, according to Transporeon, an EU logistics data platform. Hauliers are refusing to take loads to Britain citing delays and increased costs.

US consumer spending fell for the second month in a row as government-funded unemployment benefits temporarily expired and businesses faced increased Covid-19 restrictions. Inflation has been steadily increasing towards the Fed’s 2% target.

Lower Thames Crossing | It has been estimates that the country’s largest scale roads project since the M25 will create 22,000 jobs, 10,000 of which will be in the peak year of construction. A report by Highways England will be published in the Spring.
Hinkley Point | Completion will be delayed by 6 months and the total cost will increase by £500m according to EDF. “Fewer people on site and considerable disruption among suppliers” were cited as the cause.
Ability to build | The Public Accounts Committee (PAC) raised concerns over the private sector’s ability to build out the £600bn worth of schemes announced in last year’s Budget. In its report, the PAC requested reassurance over value for money, delays, and overspend on projects.