Looking ahead

Economic Week In Review | Issue 365 | 6 February 2023

UK construction and property

  • Labour | Self-employed labour rates have grown to over £1,000/week. Hudson Contract’s Managing Director commented that “tender opportunities are slowing down but [contractors currently] have full order books, which they are struggling to fulfil.”
  • Immigration | The latest survey by the Federation of Master Builders (FMB) shows that industry bosses support a relaxation of immigration laws. Around a third of FMB members are struggling to recruit carpenters/joiners, bricklayers and general labourers
  • Super deduction | Aggregate firms are asking the Chancellor to keep the super-deduction tax benefit on new plant and machinery in his Budget next month. The Mineral Products Association believes that an extension would allow companies to invest in low-carbon machinery.
  • Retentions | The Government is exploring plans to make contractors publish their retention payment policies and records.
  • Building safety | Housing Secretary, Michael Gove, has warned that house builders and developers who fail to sign a government contract which commits them to fixing unsafe towers, will be banned from the market.
  • Carbon | 49% of directors plan to accelerate their delivery of net-zero programmes over the next year, according to a survey by the British Property Federation. 28% expect to maintain investment programmes while just 2% expect to decrease levels.
  • PMI | The latest survey dropped to 48.4, from 48.8 in December, its lowest level since May 2020.

Materials and commodities

  • British Steel is considering cutting 800 jobs, raising concerns over a potential rescue package from the UK government as it was contingent on no jobs being lost.


  • Small nuclear reactors | Ontario Power Generation has signed a deal with a consortium to build a small modular reactor before 2030 in North America.
  • Site batteries | A company in Telford has developed a solar-powered battery to be used in the construction industry as an alternative to diesel generators.
  • Energy prices | Plans to reopen gas storage sites in the UK have stalled, leaving the UK vulnerable to gas shortages and high prices. It was hoped that the recently reopened Rough storage site off the Yorkshire coast would be expanded by next winter, but the lack of government support makes it unlikely. The UK’s current nine days of gas storage is much lower than Germany’s 89 days, France’s 103 days and the Netherlands’ 123 days.

UK economy

  • Base rates | The Bank of England voted to increase base rates by 0.5% to 4%, The Bank also warned of the ongoing impacts to the UK economy of “the three big hits”: Brexit, the Energy Crisis, and Covid-19. The economy is not expected to recover to pre-pandemic levels until 2026.
  • Labour shortage | The Bank of England warned that the UK’s shrinking workforce is problematic and is limiting the UK’s recovery. The number of economically inactive people of working age has increased by 3% since the pandemic.
  • Inflation in shops has reached a record high according to the British Retail Consortium (BRC), despite the overall figure easing. Food prices are up 13.8% annually and the BRC thinks that they have yet to peak.

Global economy

  • New York offices | Landlord RXR is preparing to surrender a number of properties to lenders stating that the investments no longer make sense in an era of remote work and rising interest rates.
  • US jobs market | Over half a million jobs were unexpectedly added to the US market in January, pushing the unemployment rate down to 3.4%, its lowest in 53 years.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,907.80 1.84 5.21
FTSE 250 20,593.46 2.79 -5.15
Nikkei 27,509.46 0.46 0.25
CSI 300 4,141.63 -0.95 -9.25
S&P 500 4,136.48 1.62 -8.09
Nasdaq 12,006.96 3.31 -14.83
CAC 40 7,233.94 1.93 4.06
Dax 15,476.43 2.15 2.50
$ per £ 1.2074 -2.47 -10.84
€ per £ 1.1149 -2.21 -5.71
Gold £/oz 1,547.12 -0.53 15.76
Brent Oil $/barrel 79.94 -7.75 -14.29

Weekly Summary

As the UK enters another cold snap, thoughts should turn to what next winter has in store for energy prices and how that impacts material inflation. However, it is positive that the current crisis has encouraged other energy initiatives which will also help the UK towards its sustainability goals.

The other pressing concern is labour, not just within the construction industry, but for the wider economy. The unemployment rate has been low for some time, and with changes to immigration rules, there is little opportunity to service changes in demand.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst