Skills for growth

Economic Week In Review | Issue 371 | 20 March 2023

UK construction and property

  • Skills | Five construction trades have been added to the UK’s Shortage Occupation List. Bricklayers, roofers, carpenters, plasterers, and construction and building trades n.e.c.(which covers a variety of trades) will now find an easier visa process. However several other trades including steel erectors and scaffolders still await a full decision. The CLC has submitted a lengthy list to the government for consideration.
  • Supply chain fragility | The collapse of Midas in February last year left unpaid debts of £87m. More than 700 suppliers and subcontractors have lodged claims.
  • Imports | The new Windsor Agreement (which replaces the Northern Ireland Protocol) will ease the movement of goods between Northern Ireland and the British Mainland, a move welcomed by the Construction Products Association. Any business with a turnover of less than £2 million will be able to use the easier “green route” which removes onerous checks, but construction (along with animal feed, healthcare, and not-for-profit) will be exempt from that threshold.
  • Safety | A study by NBS has found that 43% of construction professionals are unsure about new building safety rules and are unclear on the responsibilities at the planning gateways.
  • Inspectors | The Department for Levelling Up, Housing and Communities announced a £42.5m grant to support the delivery of the Building Safety Act 2022. It will fund the training and recruitment of 110 new building control inspectors and 111 fire protection officers.
  • Building remediation | Eight companies have yet to sign building remediation contracts with the Ministry of Housing, despite a deadline of 13th March.
  • HS2 | The chair of the National Infrastructure Commission spoke of the delays to HS2 saying “having to decided to build it, we should get on and build it” and “the cheapest way is to build it as quickly as possible”, commenting on the impact of inflation.

Materials and commodities

  • Iron ore prices were muted as China is expected to bring in a steel production limit.
  • Carbon footprint | Vale has produced iron ore pellets on an industrial scale without using coal for the first time ever. It is seen as a major step in reducing the carbon footprint of the process.
  • Steel | Unite has written to the Prime Minister stating its disappointment at the lack of support for the steel industry in the Budget.
  • Recycled aggregates | A new report from the Mineral Products Association shows that recycled or secondary aggregates account for almost 28% of the material used in Britain, a higher proportion than in most other major economies.
  • Crushed rock | The University of Strathclyde has found that crushing rock in carbon dioxide could capture 0.5% of global carbon emissions in a stable, insoluble form. More than 50 billion tonnes of rock is crushed annually.

UK economy

  • Tourism | The UK’s top airports intend to expand passenger numbers by 60%, flying an extra 150 million people a year (an extra 300,000 jumbo jets). A third of the growth will come from the planned expansion at Heathrow. Plans for a third runway were paused in 2020 but are expected to start again this year.
  • Inflation expectations | Public expectations for inflation have eased to a 16-month low. Households’ average rate of expansion currently stands at 3.9% for the year ahead, down from 4,8% in November.
  • Rate expectations | The Bank of England meets this week to agree on the interest rate and amount of bond sales. Some experts (including previous policymakers) have urged them to cut rates and stop bond sales due to the recent turmoil in the international banking sector.

Global economy

  • Swiss banks | Last week’s collapse of Silicon Valley Bank brought up memories of the 2008 banking crisis, which were further ignited by concerns over the financial stability of Credit Suisse. UBS Group agreed to buy Credit Suisse in a government-brokered deal
  • European interest rates | The European Central Bank lifted its base rate by 0.5% to 3.5% (for comparison, it is 4.75% in the US and 4% in the UK). The ECB’s Vice-President warned that some banks could be vulnerable to the move, however, the President assured that the Banks were much stronger than in 2008 and ECB staff can “exercise creativity in very short order, in case it is needed to respond to what could be a liquidity crisis”.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,335.40 5.33 -0.94
FTSE 250 18,470.83 -4.58 -12.69
Nikkei 27,333.79 -2.88 1.89
CSI 300 3,958.82 -0.21 -7.20
S&P 500 3,916.64 1.43 -12.24
Nasdaq 11,630.51 4.41 -16.29
CAC 40 6,925.40 -4.09 4.61
Dax 14,968.20 -4.28 3.08
$ per £ 1.2141 0.82 -7.81
€ per £ 1.1405 0.93 -4.35
Gold £/oz 1,632.47 5.15 11.95
Brent Oil $/barrel 72.97 -11.85 -32.39

Weekly Summary

After a few years of large announcements in the Budget for construction, this year’s was a light in content for the sector, instead focussing on encouraging people into the workforce. One bright spot for construction was the broadening of the Shortage Occupation List, but the industry’s skills crisis means that the sector cannot wait for government support, instead working to attract people into the sector and developing the skills we need to enable net zero by 2050.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst