Efficiency and productivity in focus

Economic Week In Review | Issue 367 | 20 February 2023

UK construction and property

  • Company finances | Data from Creditsafe shows that 23 construction companies entered administration in December, one for every working day of the month despite a reduction from the 34 administrations seen in November,
  • Unpaid invoices | The collapse of Tolent last week has reportedly left £50m of unpaid subcontractor invoices behind.
  • School buildings | Seven education unions have written to the Education Secretary warning that school buildings are unsafe. The letter follows a report last year which revealed that post-war buildings using reinforced autoclaved aerated concrete were at the end of their functional lives and are on the verge of collapse.
  • Annual total construction values passed £200bn last year, a 15% increase according to analysis by Barbour ABI, with inflation adding £23bn. The company forecasts an easing of prices in the second half of 2023
  • Industry forecasts | Glenigan reported that construction starts remained weak, and planning approvals fell in the three months to January. The value of major (£100m+) project awards fell by 31% compared to the previous quarter but was 17% higher than a year earlier, and approvals of major projects were up 67% annually. It also commented that “infrastructural investment does shine a light”, offsetting other constrained activity.
  • Fuel rebate | The Construction Plant Hire Association has petitioned Jeremy Hunt to introduce a rebate similar to the red diesel rebate for hydrotreated vegetable oil.
  • Energy saving | The City of London Corporation has suggested that property owners switch off unnecessary lighting to create “brightness zones” with curfews within the Square Mile. If the rules are passed, businesses in residential and heritage areas would switch off lights at 10pm, or 11pm for cultural and tourist areas, and midnight for commercial areas.
  • Hinkley Point | EDF energy could face a higher bill for the new nuclear power station as its Chinese partner may fail to meet extra payments. In the second half of this year EDF and CGN will be asked to make “voluntary” additional equity payments under a compensation mechanism for cost overruns. It is thought that the overall cost could increase by 20% (when compared to last year) to £32bn, and an 80% increase on the original 2016 budget of £18bn, with material price increases being blamed for much of the recent increase.
  • Construction pay continues to lag behind inflation with ONS data showing an annual increase of 5.3%.
  • Regulations | Concerns have been raised by a number of sectors, including construction, over the Retained EU Law (Revocation and Reform) Bill. The Royal Society for the Prevention of Accidents (RoSPA) has urged the government to slow down the process. Many are concerned that EU laws underpin many other UK laws, such as the Building Safety Act 2022, and removing EU rules would threaten health and safety.


  • Green steel | Europe’s first commercial green steel plant is being built in Sweden. The plant will use hydrogen technology, which will cut emissions by up to 95%. It is thought that steel production is responsible for 7% of the world’s greenhouse gas emissions.

UK economy

  • Energy bill cliff | Trade bodies and analysis have warned of a “cliff edge” in bills as government support for industry energy bills comes to an end in April. Whilst wholesale gas prices have fallen by nearly a half since October, they are almost three times higher than pre-pandemic levels.
  • Inflation | The rate of consumer inflation eased slightly to 10.1%. Despite the lower reading, it still shows that prices are increasing rapidly, at a rate faster than the Bank of England’s target.
  • Computing | A breakthrough in quantum computing could change the way we solve complex, real-world problems that today’s computers are incapable of. The transformation could allow engineering and forecasting to take place with greater precision. A Sussex University team transferred quantum information between computer chips at record speeds and accuracy.

Global economy

  • US interest rates | The US markets suggest that investors expect the Federal Reserve to lower interest rates. However, consumer price inflation has cooled by less than expected with housing costs increasing the most.
  • US retail sales grew 3% in January, more than the 1.8% forecast.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 8,004.36 1.55 4.53
FTSE 250 20,088.93 0.29 -5.96
Nikkei 27,513.13 -0.57 1.44
CSI 300 4,034.51 -1.75 -13.26
S&P 500 4,079.09 -0.28 -6.20
Nasdaq 11,787.27 0.59 -13.00
CAC 40 7,347.72 3.06 6.03
Dax 15,482.00 1.14 2.92
$ per £ 1.2014 -0.40 -11.55
€ per £ 1.1251 -0.46 -6.17
Gold £/oz 1,530.15 -1.09 9.55
Brent Oil $/barrel 83.00 -3.92 -11.27

Weekly Summary

With just over three weeks until the Spring Budget, speculation around what it could contain is increasing. It is expected that it will build on the Chancellor’s four-point plan to boost productivity. The economic context is significantly different to November, with the Bank of England expecting a smaller recession, but runaway inflation continues to impact large infrastructure projects and wages are under increasing pressure so a continued plan for productivity would be welcomed.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst