A focus on support

Economic Week In Review | Issue 369 | 6 March 2023

UK construction and property

  • Positive outlook | The latest survey by the Independent Builders Merchant Group reported that members had “too much” or “more than usual” levels of work in their pipelines and that 70% had seen stable or increasing demand, with no signs of spending slowing. Sales have been helped by the current market trend to expand living areas rather than move home.
  • Pay supplement | Engineering construction workers who operate under the Blue Book agreement will see an extra £1/hour between now and 30 June, when the supplementary payment will reduce to 75p/hour.
  • Plant sales grew 10% (by unit) when compared to January 2022 according to the Construction Equipment Association.
  • Oxford Science Park | Plans were approved for a further 400,000 sqft of space in three buildings. The buildings are designed with minimal steel and concrete and are adaptable, flexible, and demountable.
  • Planning reforms | Proposed changes to the National Planning Policy Framework have been met with challenges from developers who claim that it will impact the delivery of housing and infrastructure and that net zero ambitions seem to be an afterthought in the process.
  • Levelling Up Fund | Spending on the Levelling Up agenda is expected to be 25% smaller than expected this year. The unspent funds are mostly for housing or housing-related projects, with planning, market turmoil, and delays to delivery blamed.
  • Hospital promise | Ahead of the Budget next week, questions have been asked of the government’s commitment to build 40 new hospitals by 2030. Recent inflation is thought to have created a shortfall of nearly £2bn in the NHS capital budget.
  • Vaccine centre | Moderna is moving to the UK and building research and production facilities worth £150m in Oxfordshire.
  • Investment | Shell’s Chief Executive has said that Britain is less attractive for investment than the US and Europe because of a lack of green energy subsidies. he also added that the UK’s constant changes to tax “saps” conviction on investment.


  • Lithium | After prices increased by a factor of 15 in two years, fresh supplies caused prices to fall to a 13-month low last week. Prices have fallen from an all-time high of $86,170/tonne to $52,500/tonne.
  • Material prices increased 14% in the last year according to the BEIS. Prices have cooled slightly in the last quarter, aided by a slower commodity market.

UK economy

  • Sizewell C | The funding drive for the nuclear power plant may not be complete until the end of next year, and it is thought that the General Election in 2024 could further delay the process. An estimated £20bn needs to be found through public finance. The project was launched nearly ten years ago and is expected to take around a decade to build.
  • Energy support | Energy suppliers in Britain are expecting Government support to be extended in the March Budget and as such are preparing two sets of rates in order to respond to possible changes. The Chancellor has come under increased pressure following a data release which showed two million more households have fallen into fuel poverty (defined as households spending more than 10% of their income on fuel bills).
  • Productivity in London | A new report by Centre for Cities shows that productivity in the capital has lagged behind Paris, New York, and Brussels. Annual growth in output per hour worked has only grown 0.2% per year since 2007, slower than the UK average (which is also low at 0.3%). The slowdown in London pre-dates Brexit.
  • Rate rises | The Bank of England’s Governor has suggested that interest rate rises may have peaked, following 10 successive increases.
  • R&D costs | Research and development tax relief for small businesses will be reduced in April. Currently, small businesses can claim a rebate of about a third of their R&D costs but this will be reduced to 19%.
  • Housing | The value of all UK homes rose by over 5% last year but the figure is expected to fall this year as mortgage costs increase, according to Savills. Nationwide reported that house prices fell by 1.1% in February, the first annual fall (excluding the pandemic) since November 2012. The average home now costs 3.7% less than the peak last August.

Global economy

  • China has set a conservative target of 5% growth in GDP for this year, a lower target than many external forecasts.
  • Global debt has shown its first fall in dollar terms since 2015 according to the latest quarterly Global Debt Monitor from the Institute of International Finance. The global debt-to-GDP ratio fell by 12% to 338% of GDP.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,947.11 0.87 13.74
FTSE 250 19,925.77 1.16 2.78
Nikkei 27,927.47 1.73 11.16
CSI 300 4,130.55 1.71 -8.14
S&P 500 4,045.64 1.90 -6.54
Nasdaq 11,689.01 2.58 -12.20
CAC 40 7,348.12 2.24 21.22
Dax 15,578.39 2.42 18.97
$ per £ 1.1995 0.41 -9.21
€ per £ 1.1298 -0.26 -6.69
Gold £/oz 1,541.19 1.63 7.00
Brent Oil $/barrel 85.83 3.63 -27.33

Weekly Summary

The recent high levels of inflation in construction and the wider economy have raised significant concerns over the viability of many projects, particularly those in the public sector. However, there still seems to be a certain level of confidence in the UK market and a desire to build the right project. This means that the industry is not only looking to next week’s Budget for confidence in the pipeline and energy support, but also at ways of working more productively and efficiently.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst