Ambitions or targets?

Economic Week In Review | Issue 366 | 13 February 2023

UK construction and property

  • ESG centre | UCL’s Bartlett School of Sustainable Construction has launched the UK’s first research centre to focus on ESG practices. It is sponsored by Puma Property Finance and will look to identify reliable ways of measuring emissions and social impact, as well as improving knowledge transfer.
  • Commercial retrofit | The UK Green Building Council (UKGBC) is to launch the Advancing Net Zero Programme focussed on bettering the industry’s understanding of the carbon and cost-effectiveness of retrofitting measures.
  • Net Zero | The government announced the creation of a new Net Zero Department, formed by splitting the Department of Business Energy and Industrial Strategy into three separate parts.
  • Warehouse land values fell by half in the second part of 2022. According to Colliers, the market saw a correction triggered by the Bank of England’s rate increases. It also suggests that values have almost bottomed out.
  • Second stairs are now required in all residential buildings over 30m in London.
  • Small sites | A study by LDS Sales Guarantees and Nimbus Maps has found 320,000 small land plots which are currently unused by local authorities but could accommodate 1.6 million new homes. The report claims that nearly 100,000 acres of local authority land are going “unused and unutilised”.
  • Output | The latest ONS figures show overall output growth was flat at the end of last year. New work grew 0.5% but individual sectors showed large differences. Public new housing was up 16.5% in the month while private industrial fell 6.5% and commercial output grew 0.7%. On an annual basis, the value of all new construction work was 3.5% larger, but still 2% smaller than its pre-Covid level.

Materials and commodities

  • American materials | US President, Joe Biden, used his State of the Nation address to announce stricter standards for infrastructure projects in the US, which include using American products.
  • Net zero cement | Production trials are to begin on a new cement developed by Cambridge University which combines scrap steel recycling with cement clinker production using recycled concrete as a flux, rather than limestone.
  • Material sales | The latest data from the Construction Products Association shows that heavy side sales have fallen recently as project starts have slowed.
  • Material price pressure eased slightly according to the BEIS, falling 2% in the last quarter. However, this does not cancel out the recent price rally, and prices are still 14% higher than a year ago. Fabricated structural steel and rebar saw the largest falls in the quarter (helped by the settling commodities market) whilst cement and concrete saw increased pressure at the end of the year.

UK economy

  • Economic growth stagnated at the end of 2022, narrowly avoiding recession.
  • Tax breaks | Business groups such as the CBI are lobbying the Treasury to include tax breaks in next month’s Budget in order to increase business investment and alleviate labour shortages. Key points of focus are the Super Deduction – a measure offering 130% tax relief on companies’ purchases of equipment – which is set to expire in March, and Corporation Tax is set to increase from 19% to 25%.
  • Inflation forecasts | The Bank of England expects inflation to fall from its current level of 10.5% to 4% by the end of the year. Its Governor warned that this should be considered when agreeing to new public sector pay increases.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,882.45 0.32 2.89
FTSE 250 20,030.07 -2.74 -9.16
Nikkei 27,670.98 0.59 -0.09
CSI 300 4,106.31 -0.85 -10.76
S&P 500 4,090.46 -1.11 -7.43
Nasdaq 11,718.12 -2.41 -15.03
CAC 40 7,129.73 -1.44 1.68
Dax 157.98 -1.09 -0.76
$ per £ 1.2063 -0.10 -11.30
€ per £ 1.1304 1.39 -5.21
Gold £/oz 1,547.08 -0.01 12.87
Brent Oil $/barrel 86.39 8.07 -8.52

Weekly Summary

Net zero, ESG, and sustainability have continued to move to the front of the agenda. However, the ongoing challenge is to ensure that increased prominence generates action. Changes in leadership, branding, and focus of sustainability attributes can often create the idea of progress. In his Net Zero review the former energy minister Chris Skidmore commented that whilst progress has “exceeded expectations”, businesses still lack policy clarity. It also stated that net zero represents a huge economic opportunity if properly understood and realised.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst