Moving parts

Economic Week In Review | Issue 375 | 17 April 2023

UK construction and property

  • Commercial demand is highest in the east of England, according to research by Sirius Property Finance. Its analysis of commercial listings on Rightmove showed that a mix of low investment cost and high rent was driving demand.
  • Vaccine plant | Moderna’s new manufacturing hub in Oxfordshire will be built by Glencar this year, and the plant will be operational in 2025.
  • Spoil tunnel | A third tunnel is being built between North Acton and Old Oak Common, along the HS2 line, but it is not for trains, instead, it will be used for construction logistics, removing 70,000 lorry journeys from the roads.
  • Output bounce | Total construction output rose 2.4% in February after it fell 1.7% in January due to heavy rain. New work rose by 1.1% whilst repair and maintenance increased by 4.5%. Some expect the figures for March to be less optimistic as it was the wettest on record for 40 years.
  • Infrastructure | The plan to scrap smart motorway projects on public confidence grounds, has removed £1bn from public sector infrastructure spending, although there will be some remedial works to existing smart motorways.

Materials and commodities

  • Copper prices stagnate as contradictory news continues to create uncertainty, risk, and opportunity. The IMF has forecast a slowdown in global economic activity, but stores of copper have fallen and supply is tight. Production in Chile has fallen, but output from Peru has recovered following recent protests.
  • Aluminium prices have also stagnated after a recent bounce. The expected tightness in the market has not materialised as Russian exports are being traded with China.
  • Steel volatility | MetalMiner’s latest forecast suggests that volatility may persist in the steel market throughout 2023 due to several factors: supply and demand changes, production costs, and global economics.
  • Chinese demand | One of the world’s largest metals and oil traders – Trafigura – is to focus on Chinese trade, as it expects demand to soar as China reopens and focuses on an energy transition. Global metal processing capabilities are generally concentrated in China.
  • Shipping | After a few years of disrupted markets and a poor supply of containers for shipping, the latest Drewry World Container Index shows a 78% reduction in the cost of containers when compared to last year, but prices remain 20% higher than in 2019.

UK economy

  • GDP growth was flat in February as strike action took hold and manufacturing showed zero growth. Construction, however, showed strong growth.#
  • Workforce participation | The UK is the worst performing country amongst the G7 for workforce participation post-Covid as the number of adults in employment is lower
  • Methane pollution | Analysis by thinktank Green Alliance reveals that current measures and policies will only reduce Britain’s methane emissions by 14% by 2030 (compared with 2020 levels) instead of the targeted 30%, but that there is still opportunity to meet the target if bans on flaring and venting from North Sea platforms and methane capture at landfill are accepted.

Global economy

  • US inflation fell to its lowest level (5%) in almost two years, but core inflation rose suggesting that there is still pressure in the system. Producer prices have fallen to their lowest level since January 2021.
  • Eurozone production | Industrial output has risen by more than expected, driven by output of capital goods – goods such as buildings and equipment used to make products and to provide services. Production of non-durable consumer goods increased 1.9% after slumping 2.1% in January.
  • Toronto | Office vacancies have reached a 28-year high as remote working has led to companies “rightsizing” their spaces.
  • Dublin | Office take-up has fallen 42% and the vacancy rate has increased to 13%. Technology firms took up more than half the space at the beginning of 2023.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,871.91 1.68 3.36
FTSE 250 19,242.69 2.37 -8.90
Nikkei 28,493.47 3.72 5.17
CSI 300 4,092.00 -0.11 -2.31
S&P 500 4,137.64 0.79 -5.80
Nasdaq 12,123.47 0.29 -9.19
CAC 40 7,519.61 2.66 14.12
Dax 15,807.50 1.34 11.60
$ per £ 1.2416 -0.03 -4.94
€ per £ 1.1310 -0.63 -6.41
Gold £/oz 1,614.34 0.03 6.58
Brent Oil $/barrel 8,631.00 1.40 -22.73

Weekly Summary

It’s clear that there are still several moving parts in the market. Input prices still have some degree of volatility in them, largely driven by questions over China’s recovery and the stability of growth elsewhere. Recent reductions to the public pipeline in the UK could also cause upset to those who have pivoted their business plans towards public infrastructure work.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst