The cost of attraction

Economic Week In Review | Issue 408 | 4 December 2023

UK construction and property

  • Insolvency | Administrator Begbies Traynor reported that Michael J Lonsdale’s administration has left £65m of debt to more than 600 suppliers and subcontractors.
  • Hospitals | National Health Service England has begun its search for a Programme Delivery Partner to ensure it meets its target of 32 new hospitals by 2030. The National Audit Office warned in July that progress against the target was slow.
  • Housebuilding | The Government missed its housebuilding target last year. Its 2019 manifesto targeted 300,000 homes a year in England by the mid-2020s, but there were only 234,397 net additional dwellings in 2022/23. The Home Builders Federation said that “all leading indicators show rapid slides in future output”.
  • Construction starts | Glenigan’s November research shows that new starts fell 27% in the three months to October and are 59% lower than last year. However, planning approvals increased by 1% to be 17% higher than last year.
  • Electricians | The Electrical Contractors’ Association (ECA) launched its Recharging Electrical Skills Charter. It claims that electricians are “indispensable” in the move to low-carbon but there are not enough competent electricians, and the number of new entrants is low. It warns that the skills system is broken, with publicly funded, classroom-based courses producing no apprentices between 2017-2020. Up-skilling costs are a barrier for small businesses and new apprentices alike.
  • RAAC | The Manufacturing Technology Centre has secured a £3m government grant to develop new methods of identifying RAAC and assessing its condition. It is hoped that it will develop a mass-produced solution for a replacement programme.
  • Building Safety Regulator | The new regulator has published its three-year strategy. It says that the plan will oversee a culture of higher standards, and put safety first while restoring trust in the sector. Amongst other things, the Building Safety Regulator has vowed to inspect all buildings with unsafe cladding within its first year. The strategy is available here.

Materials and commodities

  • Builders’ merchants’ sales volumes were 10% lower in Q3 2023 than a year earlier, and values were 3% lower. The Builders Merchants Federation said that the quarter was challenging, particularly in the housebuilding sector. The home improvement market was holding up but is expected to feel the impact of interest rate rises soon.
  • Copper output from Chile – the world’s largest producer – fell 4.4% in the year to October 2023.

UK economy

  • Inflation calculations | The ONS has improved its methodology for calculating private rental prices and claims that if it were to be applied retrospectively, it would push up recent rates of inflation. It will introduce the new method in March 2024.
  • Stagnation | The Resolution Foundation and the Centre for Economic Performance at the London School of Economics found that fifteen years of economic stagnation has left the average UK household £8,300 worse off than those in countries such as France and Germany. Living standards in the UK are 3% lower than their peak and falling, with an increase forecast from 2025. The report proposes measures to boost productivity by closing the wealth gap, increasing services exports, and increasing public investment.
  • Job market | Recruitment consultant Robert Half has found that 59% of workers are confident that their role is safe for the next six months, and almost half of the survey respondents were optimistic about their career prospects over the next five years. The consultancy suggests that this could further squeeze the jobs market over the coming years and is a worrying sign for the Bank of England.
  • Migration | Data from the ONS shows that net migration was 745,000 in 2022, encouraging the Prime Minister to look at measures to reduce migration. Such measures are expected to include an increase in the salary threshold for migrants to the UK, with a move from £26,200 to £38,000 expected. A statement is expected from the Home Secretary – James Cleverly – on Monday afternoon.

Global economy

  • Chinese borrowers | Defaults have increased to a record high, with 8.54 million people (roughly 1% of the population) blacklisted by authorities due to missed payments. Pre-pandemic levels were around 5.7 million defaulters. Household debt as a percentage of GDP has also grown, reaching 64% in September, having almost doubled in the last decade.
  • Evergrande | The heavily indebted Chinese developer was given breathing room as its liquidation decision has been delayed until 29th January 2024.
  • Swiss inflation slowed unexpectedly to 1.4%, a two-year low. Core inflation (which removes volatile food and energy from the equation), also fell to 1.4%. The change was driven by lower prices for hotels, holidays, fuel, and food.
  • German investment | Germany has approved a €700 million fund to ensure the construction of a battery plant despite a budget freeze after officials won an exemption from the freeze.
  • US economy | Consumer spending, inflation and the labour market have all cooled recently, causing many to suggest that the economy is slowing, although this would be along the lines of the Federal Reserve’s preferred glide path for a soft landing.
  • Public debt amongst OECD countries has increased to post-war highs. Japan’s debt stands at 254% of GDP, and Italy’s at 148%. High interest rates mean that debt levels are rising faster than GDP.


  • Energy & Emissions | The International Energy Agency reported that coal-related CO2 emissions fell in the US last year, due to the retirement of older plants, but overall energy-related CO2 emissions increased, driven by transportation emissions.
  • Emissions and growth | Ahead of the UN summit on the environment, India’s Prime Minister, Narendra Modi, said that emerging economies “must have access to equitable carbon and development space to achieve sustainable development”. It comes as India’s Foreign Secretary said that coal would continue to be India’s main fuel for years to come.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,529.35 0.55 -0.36
FTSE 250 18,408.65 -0.27 -4.93
Nikkei 33,431.51 -0.58 20.35
CSI 300 3,482.88 -1.56 -10.03
S&P 500 4,594.63 0.77 12.84
Nasdaq 14,305.03 0.38 24.81
CAC 40 7,346.15 0.73 8.96
Dax 16,397.52 2.46 12.86
$ per £ 1.2683 0.66 3.19
€ per £ 1.1657 1.15 -0.21
Gold £/oz 1,630.20 2.72 11.48
Brent Oil $/barrel 78.88 -1.99 -7.82

Weekly Summary

After a fairly busy summer and autumn, the news was fairly subdued this week. However, some important reports were released discussing two inextricably linked issues: the future of skills and UK living standards. This reinforces the need to focus on how we attract new people into the industry and retain them once they start work.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst