The Earth Day edition

Economic Week In Review | Issue 426 | 22 April 2024

UK construction and property

  • Labour supply | Costain has formed a new Integrated Labour Team (ILT) from four other firms which will become its first port of call for any temporary labour needed on a project. It says that it will use the ILT to confirm a pipeline of supply and have real employment terms for temporary workers.
  • Building standards | The Chartered Institute of Building Services Engineers plans to accept fee-paying organisations as “chartered organisations”, believing that it would raise standards in the industry. It said the programme is “far beyond a mere certification, this programme symbolises exceptional standards, embodying professionalism in its truest sense.”
  • On hold | The Secretary of State for Levelling Up, Housing and Communities has issued an Article 31 notice on the plans to redevelop 140 and 150 London Wall, which prevented it from gaining planning permission. The Holding Direction means that applications should be referred to Michael Gove instead of the City of London Corporation.
  • Film studios | Renowned director, James Cameron, has backed plans for a new studio scheme west of London in a letter to Buckinghamshire Council, who will vote on planning permission later this month. He said, “The 22.5% of the total global box office the UK delivered in 2023 will grow” as a consequence of studios which embrace advanced technology.
  • Infrastructure framework | The Atomic Weapons Establishment has published a plan to seek interest from suppliers for its planned works. It has two complex infrastructure programmes: Future Materials Campus and the Future Infrastructure Programme.
  • Scottish Building Safety Levy | The proposed levy would mirror legislation passed by the UK parliament and cover the construction of new residential buildings. However, the Scottish Government cannot pass legislation without approval from Westminster.
  • JCT changes | 2024 JCT Update including previously optional clauses on collaborative working and early disputes notifications – now included in the contract’s main provisions, and the contractor assuming the roles of both principal designer and principal contractor in relation to the Building Regs updated by the Building Safety Act 2022. The update, which is scheduled for release on 1st May, has been dismissed as “inadequate” by a critic, with law firms saying that it represents a change in emphasis rather than process.
  • Social housing | Unless funding certainty is given beyond the 2021/26 Affordable Homes Programme, JV North (which represents 13 housing associations and local authority members from the north west) has warned that developments of over 50 homes, or those that take longer than 12 months, are now at risk. Usually, support for affordable housing from the Government overlaps in funding horizons to allow continuous work, but it was absent from the last Budget.
  • Grey belt | Labour announced plans to unlock the building of thousands of homes by allowing poor-quality parts of the green belt to be built on. Plans need to provide at least 50% affordable homes. Knight Frank has identified 11,000 sites which would deliver between 100,000 and 200,000 homes. The proposed policy rules out building on “genuine nature spots” and must deliver improvements to existing green spaces.
  • Office rents | According to Carter Jonas, low vacancy rates for premium offices have driven up rents. It expects the gap between Grade A and lower-quality Grade B space to widen.

Materials and commodities

  • Private security | The recent surge in maritime violence has led to an increase in demand for private security forces. One security company said that providing armed power on a ship had become a “commoditised business” and modern versions involve staff in an office tracking ships and potential risks. Before the current crisis, security provision rates could be as low as $2,000, and current rates for a transit past Somalia can be $60,000. However, it is not expected to be as lucrative a business as during the peak of Somalia’s piracy problem (2009-2012).
  • Easing | Oil and gold prices fell slightly as Iran-Israel tensions eased. A significant concern focussed on the Iranian-controlled Strait of Hormuz, which currently handles 21 million barrels of crude oil every day, and a fifth of the global total of liquified natural gas.

UK economy

  • Retail sales by volume saw growth of just 0.1% in March, lower than the 0.3% expected. Volumes are still 1.2% lower than their February 2020 level.
  • Housing | Data from Rightmove revealed that asking prices reached a near-record level in April, driven by larger properties. Detached properties with four or more bedrooms recorded a rise of 2.7% compared to the month before.
  • Thames Water has applied to OFWAT to increase its spending plan to £19.8bn and expects to increase bills by 40% by 2030. Chronic leaks and sewage spills need repair but the work (and the related need for equity) does not have the support of shareholders.

Global economy

  • China’s power | 7 gigawatts of solar power was installed in China in the first quarter of 2024, but its progress has been hampered by a lack of capacity in the grid.
  • Saudi Arabia | Rishi Sunak will launch an investment drive at a trade expo in Riyadh next month to support Crown Prince Mohammed bin Salman’s Vision 2030. More than 300 British business executives will attend.

Environment

  • Scotland 2030 | The Scottish Government announced that it will abandon its target to lower greenhouse gas emissions by 75% by 2030 after the Climate Change Committee said the target was unrealistic. It will instead target 100% net zero by 2045.
  • Embodied carbon | The Institute of Structural Engineers has raised concerns about the lack of regulation of embodied carbon in the Future Homes and Building Standards proposals. It described the omission as “a missed opportunity.”
  • Heatwave-linked deaths have increased by 30% in the last 20 years, according to meteorological
  • Climate change insurance | The EU’s insurance regulator, Eipoa, has warned about the rise in losses from natural disasters and raised concerns that some areas could be rendered uninsurable.
  • Election interruption | India’s General Election could be interrupted as temperatures are expected to reach new highs above 45C in some areas. Public health experts have warned that hundreds of millions of votes are at risk, and turnout may be low. Nearly 1 billion people are expected to vote over the next six weeks.
  • Lebanon | Research published by the American University of Beirut links the capital’s over-reliance on diesel generators with a doubling of the risk of developing cancer. It estimates that 8,000 diesel generators power the city after its economic collapse in 2019 caused its grid to collapse, with Human Rights Watch flagging the lack of a reliable power supply.
  • Global health | In a new report. the International Labour Organization estimates that 70% of the global workforce is exposed to climate change-related health hazards. Temperatures in 2024 are expected to exceed current records.

Friday to Friday

Price / Index Week %
change
Annual %
change
FTSE 100 7,895.85 -1.25 -0.23
FTSE 250 19,391.30 -1.67 0.63
Nikkei 37,068.35 -6.21 29.77
CSI 300 3,541.66 1.89 -12.17
S&P 500 4,967.23 -3.05 20.17
Nasdaq 15,282.01 -5.52 26.59
CAC 40 8,022.41 -0.63 5.88
Dax 17,737.36 -1.08 11.68
$ per £ 1.2397 -0.48 -0.17
€ per £ 1.1635 -0.55 2.80
Gold £/oz 1,933.81 2.70 21.36
Brent Oil $/barrel 87.29 -3.49 6.89

Weekly Summary

It seems fitting that on Earth Day, this publication has a substantial section on the environment and that the contents of this section reflect the gravity of upcoming regulatory horizons and the responsibilities that we have as consumers of vast amounts of materials and developers of urban environments.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst