Issue 287 | 5 July 2021 - Turner & Townsend alinea

Materials and machines

Protectionist tariffs | The government has extended measures to defend the UK steel sector from cheaper Chinese imports. Imports on some products will face a 25% tariff outside of quotas. The continuation is contrary to the advice given by the Trade Remedies Authority, meaning that it could be open to challenge by the World Trade Organisation.
Timber | US lumber prices continued to fall, posting a loss of more than 40% in June. It has fallen more than 18% this year and is on course for its first negative half-year since 2015.
JCB will recruit 500 new shop floor employees as it experiences unprecedented demand. 850 jobs have already been created this year.

Investment boom | Nearly two thirds of real estate professionals surveyed by Property Week expect investment volumes to return to pre-pandemic levels by the end of the year. Nearly 44% said they expect overseas investment to come primarily from Asia-Pacific and most think the investment will be in supermarkets, industrial, and healthcare.
Prompt payment | The reformed Prompt Payment Code will require firms to demonstrate that they have paid 95% of invoices to businesses with fewer than 50 employees within 30 days. Invoices for larger firms remain at 60 days.
Building safety | The government has published the Building Safety Bill which intends to change the way residential tall buildings are built, ensuring that assigned people are responsible for safety during design, build, and occupation, and an extended claims period for substandard work which will be extended from 6 to 15 years retrospectively.
Furlough | Data from HMRC shows that the construction industry has claimed almost six times more than the next highest-claiming industry (transportation and storage) in the total furlough period, claiming more than 40% of the fund’s £25.25bn of grants have gone to the construction industry. This partly reflects the industry’s reliance on self-employed labour.

Car manufacturing | Nissan announced it will build a battery factory as part of its £1bn investment plan for its Sunderland plant. Under the Rules of Origin agreed between the EU and UK, batteries will need to be made in the UK or the EU by 2027 in order to qualify for tariff-free trade.
Savings | Households in Britain built savings up to a near-record at the start of 2021 as spending opportunities were limited, according to the ONS. The savings ratio rose from 16.1% in the three months to December, to 19.9%, below the record 25.9% set in Q2 2020.
Foreign investment | According to a report by EY, foreign investment in London fell in 2020. Despite that, the UK remained the most attractive destination in Europe, securing a fifth of all FDI into Europe. However, the UK’s lead has narrowed to the smallest since the survey began in 2000.
Services PMI | The latest IHS Markit/CIPS PMI for services edged down slightly from 62.9 in May to 62.4 in June but remains well above the marker for no change. Job creation was the fastest in seven years, but shortages were high.
UK GDP fell 1.6% in Q1 2021, more than initially thought, and remains 8.8% lower than pre-pandemic levels. However, growth in February and March was positive.

EU travel | The EU launched a digital certificate system to allow vaccinated travelers or those with a negative result to travel to other member states. It replaces currently lengthy paperwork.
Australian investment | Macquarie, an Australian bank, has set up a new business, called Goodstone Living, to invest over £1bn in the UK rental housing market