Ups and downs

Economic Week In Review | Issue 434 | 17 June 2024

General Election

  • Productivity boost | The Construction Leadership Council has written an open letter to the next government outlining measures which it says could add £45bn to the UK economy by boosting productivity in the construction industry. The recommendations include a return of private finance for public infrastructure and a 10-year infrastructure plan.
  • Consultant spending | Labour and the Conservatives have both pledged to half the government’s spending on external advisory companies, losing consultants a combined £3bn over five years.
  • Demolition planning | The Green Party’s manifesto tightens the rules around demolition, saying that demolition work should require full planning application or inclusion in a local development order. It also pledges to provide a £29bn fund to insulate homes to at least an EPC B over the next 10 years.

UK construction and property

  • Home planning permissions have reached a new low according to the Home Builders Federation’s Housing Pipeline Report. In the year to March 2024, the fewest housing sites were given consent than any 12-month period since 2006 when the data series began. In London, Q1 2024 saw the lowest quarterly figure since 2012.
  • Output | Poor weather in April caused construction output to fall 1.4% when compared to March, reaching the lowest level since June 2022. Only public new work and non-residential repair and maintenance work grew, 3.4% and 0.6% respectively. According to the Met Office, April 2024 saw 155% of the long-term monthly average rainfall for April.
  • Wages | According to the ONS, construction wages grew by 2.9% in the year to April 2024, an increase from the previous month’s 0.5%. In the wider economy, wages grew by 5.3%. The number of construction vacancies also increased between March and April.
  • Pay deal | The Building and Allied Trades Joint Industry Council (BATJIC) has agreed to a 4% wage increase and an additional day of annual leave for small builders. The agreement comes into effect on Monday 17th June 2024.
  • City plan | The consultation period on the London City Plan 2040 ends at 11pm on 17th Historic England has warned that the plan is “unsound in its current form” due to its heritage impacts.

Global economy

  • China’s growth | Industrial output growth slowed in May and property prices saw a sharper fall than expected, whilst retail sales were better than expected.
  • US bank rates | The Federal Reserve maintained its central rate but suggested that it now sees just one rate cut this year, as inflation is expected to trend higher than previously expected.

UK economy

  • Inflation expectations | The public’s inflation expectations have fallen to the lowest in almost three years, returning to the long-term average. The average person now expects inflation to be 2.8% over the next 12 months.
  • Manufacturing | Trade body Make UK’s latest survey shows that manufacturers are expecting orders and output to increase dramatically in the second half of the year, but growth is threatened by a shortage of skilled workers. Manufacturing is expected to grow by 1.2% this year.
  • Environmental health | A body representing environmental health workers has warned that outbreaks of foodborne illnesses, such as E coli, are likely to increase unless urgent action is taken to solve chronic staff shortages of officers.

Materials and commodities

  • Merchants’ sales | The latest Builders Merchant Building Index report shows that takings were 7.2% lower in value Q1 2024 than in Q1 2023, and 8.7% lower in volume. Prices increased 1.6%. Workwear and Safetywear rose the lost at 11.5% whilst Timber and Joinery fell by 10.6% and Heavy Building Materials by 9.4%.
  • Brick imports | Data from the Massachusetts Institute of Technology’s Observatory of Economic Complexity shows that the UK is the top-ranking country for brick imports. More than 500 million bricks were imported in 2022, with a carbon cost of 288,190 tonnes.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 8,146.86 -1.19 6.60
FTSE 250 20,120.36 -2.12 5.72
Nikkei 38,814.56 0.34 15.16
CSI 300 3,541.53 -0.91 -10.64
S&P 500 5,431.60 1.58 23.18
Nasdaq 17,688.88 3.24 29.21
CAC 40 7,503.27 -6.23 1.55
Dax 18,002.02 -2.99 10.05
$ per £ 1.2684 -0.32 -1.02
€ per £ 1.1886 0.69 1.08
Gold £/oz 1,839.07 1.98 20.46
Brent Oil $/barrel 82.62 3.77 7.84

Weekly Summary

The main parties have all issued their Manifestos with varying levels of support and interest for the construction industry.

This week will bring updated data on CPI which will inform the Bank of England’s rate decision on Thursday, and will no doubt inform the election campaign as it enters its final fortnight.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst