Asking questions

Economic Week In Review | Issue 374 | 11 April 2023

UK construction and property

  • Mapping | A digital map of underground pipes and cables has been launched by the Government. It claims that the National Underground Asset Register (NUAR) will improve efficiency and minimise disruption.
  • Unpaid bills | According to accountants Mazars, builders’ merchants have applied to the courts to wind up 185 firms in 2022/2023, compared to 44 last year. It is claimed that the high cost of construction materials has left several companies unable to pay their bills and merchants are being forced to take more aggressive action towards debtors.
  • Output | Construction PMI fell from 54.6 in February to 50.7 in March, signalling marginal growth in output, as it is still above the crucial 50.0 marker for “no change”. Civil engineering was the strongest sector, recording 52.0, followed by commercial at 51.1, whilst housebuilding was the weakest at 44.2. Respondents to the survey reported fewer tender opportunities due to rising borrowing costs and a slowdown in the housebuilding market.

Materials and currencies

  • Low-carbon concrete | Laing O’Rourke announced a commitment to low-carbon concrete on all new UK sites, having been involved in a long-term research project with Innovate UK and the University of Cambridge and Sheffield University’s Advanced Manufacturing Research Centre (AMRC). It is expected to reduce overall carbon emitted by concrete manufacture by 28% compared to 2022.
  • Polypipe recycling | A recycling trial is being carried out by manufacturer Polypipe Building Services. Since starting at three branches in January 2022, it has collected 2,700kg of recyclable waste.
  • Steel reuse | The redevelopment of Cripplegate House in London will reuse the existing steelwork in the new development. Steelwork sections will be deconstructed, de-fabricated, recertified and refabricated.
  • UK imports | The Government has issued its Target Operating Model (TOM) which details post-Brexit border control arrangements, having delayed them since January 2020. British Ports Association reported that most of the specially built port infrastructure is likely to be surplus to requirements and that fewer goods should be subject to inspections.
  • Sterling reached a 10-month high against the dollar as the UK economy has shown signs that it will avoid a recession. Some analysts have also suggested that it is seen as a more protected currency given recent banking shocks in the US and Europe.
  • Recycling plant concerns | Exxon’s new “advanced recycling” plant for hard-to-recycle plastic in Texas has attracted criticism that it will generate hazardous pollution. Oil companies have announced plans to build the capacity to recycle nearly 450,000 tonnes of plastic each year, however, ExxonMobil alone produces 6 million tonnes of new single-use plastic every year.

UK economy

  • Household spending | In response to persistently high inflation, households in Britain are reducing their spending on groceries and eating out. The latest survey from Barclays Plc shows that credit and debit card spending has increased by 4%, less than half the rate of inflation.
  • A month of increases | The new financial year is expected to bring a raft of price increases for everything from phone tariffs to council tax, stamps, prescriptions and energy rates.
  • Trade | The UK recently joined the Asia-Pacific CPTPP trade bloc, with a suggested GDP benefit of just 0.08%. It has been suggested, however, that the move may be more politically- than economically-motivated.

Global economy

  • China’s construction | Almost two-thirds of China’s provinces have announced spending plans including large infrastructure, energy and industrial parks this year, with overall spending totalling $1.8tn, a 17%.increase on last year. Analysts hope that this spending on manufacturing and construction will boost the economy. China also announced plans to cut steel production to meet environmental targets, suggesting that the new work will be less steel-reliant.
  • China’s stimulus | Consumer and producer inflation in China was muted in March, with analysts suggesting that more monetary or fiscal stimulus is needed in order to strengthen the economy.
  • Interest rates | The IMF has predicted that ”when inflation is brought back under control” interest rates in advanced economies will likely return to pre-pandemic levels. It commented that this would depend upon the persistence of public debt, how climate policies are financed, and the extent of de-globalisation.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,741.56 1.44 0.94
FTSE 250 18,797.03 -0.69 -11.23
Nikkei 27,472.62 -2.03 1.80
CSI 300 4,096.64 1.13 -3.17
S&P 500 4,105.20 -0.10 -8.54
Nasdaq 12,087.96 -1.10 -11.84
CAC 40 7,324.75 0.03 11.86
Dax 15,597.89 -0.20 9.20
$ per £ 1.2420 0.42 -4.68
€ per £ 1.1382 0.05 -5.01
Gold £/oz 1,613.88 1.07 8.02
Brent Oil $/barrel 85.12 6.71 -17.18

Weekly Summary

Materials will no doubt continue to be a feature of conversations on construction pricing over the next year as the market continues to be disrupted by change. The move to net zero or circular systems means a different way of working and new supply systems. However, these changes could also encourage a better understanding of material sourcing and supply within the industry, the opaqueness of which has compounded recent crises.

The relentless increase in prices across the UK economy is causing some to question if there is an element of ‘excuseflation’ (companies continuing to raise prices simply because people expect it). This should encourage us to question the detail of prices more closely.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst