Navigating uncertainty

Economic Week In Review | Issue 364 | 30 January 2023

UK construction and property

  • Construction starts fell by 48% between Q3 and Q4 2022, and were 20% lower than the same quarter in 2021, according to data analyst Glenigan. However, it also revealed that planning approvals were up slightly and are 5% higher than Q4 2021.
  • Retail | Eight retailers announced expansion programmes that will see high numbers of new stores built around the UK with many mentioning that they wanted to “give people another reason to visit the high street”. High street footfall between Christmas and new year was only 7% higher than in 2021 and was nearly 20% lower than in 2019.
  • UK Infrastructure Bank | The UKIB has been criticised by the Public Accounts Committee for being rushed-through with “weak financial governance. The Bank has currently deployed £1bn of its £22bn fund in 10 deals. Its critics have pointed out that it is funding small, low-risk schemes, that could achieve funding elsewhere.
  • Industrial sector | Despite a recent dip in values, London estate agent Robert Irving Burns expects the industrial sector to remain resilient owing to strong demand.
  • Material sales | Builders’ merchants reported that the sales values were up 1.4% in November 2022, but the sales volumes were 13.6% lower. A 17.3% increase in prices caused the difference.
  • Construction forecasts | The Construction Products Association expects output to fall by 4.7% this year, a severe downgrade from its projection six months ago of -0.4%. Private housing new build and private housing repair, maintenance and improvement are expected to be the worst affected. However, it has been clear on the need for “keeping in mind the broader context that this is not 2008 and the decline is nowhere near the fall in output that occurred in the last recession”

Steel support package

  • Jobs | British Steel and Tata have been told by the UK government that in order to unlock £600m funding, they have to guarantee a certain number of jobs until 2033. The funding will help to upgrade and decarbonise UK plants.
  • Carbon border tax | The UK is expected to propose a levy on imported steel as part of its support package for the UK steel industry.
  • Energy support | The Treasury has agreed upon bespoke aid to support the steel industry on its energy bills. It will provide compensation for a number of existing levies that will help reduce electricity price differences with European steel producers.


  • Nuclear reactors are expected to run for twice their 40-year lifespan to help countries meet their emissions targets and tackle the volatile energy market. By 2030 two-thirds of the world’s current reactors will be running outside of their planned for life.

UK economy

  • Company finances are coming under increasing scrutiny as Begbies Traynor has warned that the number of firms in severe financial pressure grew by nearly a third at the end of 2022. A firm is in critical financial distress if it has more than £5,000 in county court judgments or a winding-up petition against it.
  • Profit warnings from UK-listed companies increased 50% last year to a total of 305, according to an analysis by EY Parthenon. Increasing costs were cited as the main driver.
  • Pillars for growth | The Chancellor revealed “four pillars” that will act as a framework to assess individual policies. The pillars are enterprise, education, employment, and everywhere.
  • Productivity in Q3 2022 was 1.6% higher than in 2019, after growing 0.1% between Q2 and Q3 last year according to the ONS. Construction productivity is currently 0.7% higher than the 2019 average.


Global economy

  • China has committed to making consumption the “main driving force” of the economy as it abandons its zero-Covid policy.
  • Base rates | The European Central Bank will meet on Thursday and it is expected that it will raise interest rates again.
  • World Economic Forum | The 53rd annual meeting in Davos concluded, having met under the theme of “Cooperation in a Fragmented World”. Key takeaways included that urgent action is needed to tackle the climate crisis and that in order to tackle sustainability, economic and health challenges, the world needs to adopt a united approach.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,765.15 -0.07 4.01
FTSE 250 20,035.39 1.69 -7.43
Nikkei 27,382.56 3.12 2.49
CSI 300 4,181.53 0.00 -8.38
S&P 500 4,070.56 2.47 -8.15
Nasdaq 11,621.71 4.32 -15.60
CAC 40 7,097.21 1.45 1.89
Dax 15,150.03 0.77 -1.10
$ per £ 1.2380 0.07 -7.71
€ per £ 1.1401 -0.18 -5.16
Gold £/oz 1,555.40 0.13 16.32
Brent Oil $/barrel 86.66 -1.11 -3.74

Weekly Summary

The Construction Products Association’s forecast is fairly bleak, but should be considered in context; not just in time and compared to the 2008 impacts, but when comparing the fate of different sectors and when compared to the post-pandemic period. The ’race for space’ helped push private housing repairs to a historic high, and infrastructure spending has also reached historic highs recently.

We began the year hoping for more political stability, which would bring about greater economic sustainability. The latest sacking of Nadhim Zahawi shows that we are still some way from this. Looking ahead to the Spring Budget, we hope that some form of stability can be achieved so that policies can be delivered and confidence can be restored to some degree.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst