Seeking clarity

Economic Week In Review | Issue 391 | 7 August 2023

UK construction and property

  • Pay | Engineering construction workers covered by the Blue Book agreement have rejected the latest pay offer which included an 8.5% increase in 2024 and an additional 3.5% in 2025 (which would increase to 5.0% if consumer price inflation remained above 3.5%). Unite said that they are now in a formal dispute over pay and will be balloting members for lawful industrial action.
  • Hinkley Point labour | A dispute over pay and shift patterns will see more than 300 scaffolders at Hinkley Point stop work for almost a week in an unofficial strike
  • PMI | The S&P Global / CIPS UK Construction Purchasing Managers’ Index posted 51.7 in July, an increase from 48.9 in June. Commercial building was strongest at 54.4, civil engineering at 53.9, and house building saw a steep fall to 43.0. The survey also revealed that supply conditions have improved considerably.
  • Home improvements | The Federation of Master Builders has reported a steady upwards trend in Repair, Maintenance, and Improvement (RMI) work. It is thought to be driven by sentiment turning against moving house in the face of high interest rates. The report also showed that labour levels were still a challenge.


  • Bricks | Ibstock has closed a factory in Lancashire in response to falling demand. The site produced its higher-cost wire-cut bricks. The Department for Business and Trade reported that brick deliveries have fallen almost 15% between June 2022 and June 2023.
  • UKCA marking | Following last week’s announcement that the use of CE marking in the UK will remain indefinitely, it was confirmed that construction products must use the UKCA mark from 30th June 2025.
  • Aggregate sales | Data from the Mineral Products Association (MPA) shows a decline in sales in the second quarter of 2023, with falls in materials usually used in infrastructure projects and housebuilding. The MPA’s director of economic affairs wrote that the “government’s propensity to over-promise and under-deliver presents a clear roadblock” and that clear direction would allow businesses to invest and make business decisions. However, that data conflicts with the most recent RICS report which states that infrastructure work has increased 17% in the last quarter.
  • Material prices | The latest tracker from the Department for Business and Trade showed that material price pressures softened in June 2023 but remain much higher than pre-pandemic levels.

UK economy

  • Post-Brexit trade | Border checks for food have been further delayed due to fears that the additional red tape could drive more inflation.
  • Housing | The Halifax House Price Index fell for a fourth consecutive month. Analysts suggest that the housing market will see a gradual drop rather than a sudden decline. However, activity amongst first-time buyers is generally holding up.
  • Business confidence has fallen, with the latest Business Trends report from accountants, BDO, showing that hiring intentions have fallen for the first time in six months. It also reported that manufacturing output has fallen to its lowest since the beginning of the pandemic.
  • Interest rates were increased again to 5.25%.
  • Inflation rates | The Bank of England now expects inflation to fall to “around 5%” by the end of the year. However, its forecasts have been criticised for consistently underestimating the rate of inflation, leading to a review of its forecasting by Ben Bernanke, a former head of the US central bank.
  • Levelling up | London has remained as the UK’s main investment hub, extending the gap between other areas in the UK, in a study by the University of Cardiff and Nottingham Business School. It raised concerns over the “decoupling” of regions in the UK and noted the proximity to London as a key differentiator.

Global economy

  • US jobs | More jobs were created in the US than expected. Private payrolls increased by 324,000 in July showing the persistent strength of the US labour market.
  • China | Merger and acquisition investment from China in the US has fallen to its lowest level in almost two decades, reaching just $221m in the year to date. In the same period last year, investment was $3.4bn.


  • Ocean temperatures reached their hottest ever, according to the EU’s climate change service, Copernicus. In addition to being a sign of climate change, warmer water absorbs less carbon dioxide from the atmosphere.
  • Wind farm | BP is considering building two wind farms in the Irish Sea without any subsidies, with construction expected to start next year.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,564.37 -1.69 1.68
FTSE 250 18,934.62 -0.99 -5.57
Nikkei 32,192.75 -1.73 14.26
CSI 300 4,020.58 0.70 -3.28
S&P 500 4,478.03 -2.27 8.03
Nasdaq 13,909.24 -2.85 9.89
CAC 40 7,315.07 -2.16 11.99
Dax 15,951.86 -3.14 17.52
$ per £ 1.2775 -0.72 5.94
€ per £ 1.1576 -0.69 -2.39
Gold £/oz 1,523.98 -0.06 3.64
Brent Oil $/barrel 86.24 1.47 -9.14

Weekly Summary

The advice from the Mineral Products Association is not an unusual one, but it has been repeated often. The industry is looking for certainty in order to plan investment. The changeable nature of the market over the last few years, driven by changing policy, the cost of money, and access to markets have driven a greater need for confidence in the pipeline.

The confusion over CE/UKCA marking for construction products over the last week shows that the industry does not have clarity on the new regulations. There are many changes taking place in the sector, such as the review of product testing, Building Safety Regulator, and a focus on carbon, which all require focus and understanding to ensure the industry is ready for the changes.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst