Trade in focus

Economic Week In Review | Issue 477 | 28 April 2025

UK construction and property

  • Transaction volumes for UK real estate fell by 35% in Q1 2025, to £9.3bn according to Lambert Smith Hampton. It marks the lowest quarterly total since Q3 2023 but follows a two-and-a-half-year high at the end of 2024. The fall was attributed to a reduction in large-sale transactions as the number of deals above £200m fell to six from 13 in the previous quarter.
  • Housing starts fell by more than 25% last year, according to days from the ONS. Construction started on 132,460 new homes in the UK, which highlights the challenge the government has in delivering 300,000 homes a year to reach its 1.5 million new homes within the next four years.
  • Building control | In response to last year’s final report from the Grenfell Tower Inquiry, the Ministry of Housing has established the Building Control Independent Panel. Chaired by Dame Judith Hackitt, the panel will consider whether to remove commercial interest from building control and whether to create a national authority decision model.
  • Planning reforms | The government has said amendments to the planning bill will halve the average two-year statutory pre-consultation period on major projects and could save £1bn during this parliament. The Ministry of Housing, Communities and Local Government announced changes last week to the Planning and Infrastructure Bill with “Burdensome statutory consultation requirements unique to major infrastructure projects” to be scrapped.
  • AI startups | Technology innovation body Digital Catapult has selected ten AI startups to tackle inefficiencies in construction through a government-backed accelerator aimed at scaling digital solutions into real-world project delivery. The initiative forms part of the BridgeAI programme, a national AI adoption drive designed to support digital transformation in sectors with high growth potential but historically low uptake on AI. The construction-focused accelerator would apply AI to persistent sector challenges including fragmented workflows, compliance complexity, and the slow uptake of modern methods of construction (MMC).

Global economy

  • UK-US trade | Britain’s trade with the US grew 10 times faster than with the EU last year. UK-US trade rose by 3.2% in 2024, compared to the 0.3% growth in transactions with members of the bloc. While the EU remains a bigger trading partner for Britain, the balance has been shifting. The US accounts for 13.5% of all UK trade, the highest level in over 20 years. Meanwhile, the EU’s share has slumped to 41%, the lowest since records began in 1997, down from 44.5% a decade ago and more than 50% before the financial crisis.
  • Business growth | European business growth stalled in April, with erratic U.S. trade policy appearing to take a heavy toll on sentiment – though not yet on supply. Optimism among services firms in the eurozone fell, with the outlook at its lowest since mid-2020. However, manufacturing activity, in decline for nearly three years, saw some signs of improvement in the eurozone, with the sector’s PMI rising to a 27-month high of 48.7 from 48.6. This is compared to the UK’s manufacturing sector, which is already struggling, faring even worse in April as its PMI fell to 44.0 from 44.9, marking a 20-month low.
  • Global growth forecast | US tariffs leading to global trade disruption and unprecedented uncertainty is set to significantly slow growth in economies around the world, according to the International Monetary Fund (IMF). Global growth is projected to fall from 3.3% in 2024 to 2.8% in 2025, before edging up to 3% in 2026, according to its World Economic Outlook report. US growth is expected to be hit the hardest, now expected to be 1.8%, down from the IMFs estimate of 2.7% in January.
  • Demand impact | Logistics groups say that container bookings have fallen sharply since the introduction of US tariffs and the escalating US/China trade war. Container bookings from China to the US are 45% lower than a year ago according to tracking service Vision. Goods from China usually enter the US through the Port of Los Angeles, and it expects arrivals in May to be a third lower than the same period last year.

UK economy

  • UK growth | The UK economy is predicted to grow 1.1% this year, 0.5% less than January’s forecast, partly reflective of the impact of tariffs, and weaker consumption amid higher inflation driven by bills and energy price hikes, according to the IMF’s latest World Economic Outlook report. Meanwhile, inflation forecasts have been revised upwards for advanced economies since January, with the UK and the US being hit the hardest. UK inflation is set to be 0.7% higher this year, compared with the previous forecast, at 3.1% – largely due to prices like water and electricity rising from April. This is higher than all other countries in the group of seven advanced economies (G7), which includes Germany, France, Italy, Japan, Canada and the US.
  • Zonal pricing | Energy Secretary Ed Miliband is considering zonal pricing for energy, which could mean the cost of power would vary regionally. Bills could be cheaper for people living near wind or solar farms for example. However, the policy has attracted a lot of criticism with opinion polls showing that 58% of people in England and Wales oppose zonal pricing. Research from the UK Energy Research Centre found zonal pricing “could increase consumer costs by up to £3 billion annually.”
  • Insolvencies | More than 1,100 companies have faced winding-up orders since the beginning of the year, an increase of nearly a quarter compared 2024 and the fastest rate of corporate closures since 2010. There has also been an increase in winding-up petitions, an increase of more than a fifth since 2024 and the highest since 2012, largely in retail and hospitality businesses. This high reflects the struggle for many small and medium-sized companies to pay off debts, tax hikes, higher wage bills and sluggish economic growth. These factors have encouraged creditors to become more aggressive and aren’t afraid to turn to the courts to recover outstanding debts.

Materials, commodities and currencies

  • Carbon rating system | The world’s first carbon ratings system for cement and concrete has been launched by the Global Cement & Concrete Association (GCCA). The system will use an AA to G scale similar to household appliances, which it hopes will add clarity and transparency and help builders to make informed and sustainable choices.
  • Iron ore prices have continued to fall on concerns that US President Donald Trump’s trade war could hurt global economic growth. The steelmaking ingredient fell 1% as traders assessed the President’s country-specific negotiations. Iron ore futures retreated, after growing by more than 2% last Monday on expectations that China may announce some stimulus measures.
  • Steel | The Construction Leadership Council (CLC) has issued a statement warning that US tariffs could lead to substandard steel from China being diverted into the UK market, with the CLC’s Material Supply Chain Group monitoring potential impacts from the tariffs on steel imports. The statement said, “while this could temporarily reduce prices, the primary concern is ensuring that imported materials, regardless of origin, are compliant and safe.” The CLC added that, beyond steel, most price rises predicted in March have now been apppplied, with most being between 3% and 7%. Notable exceptions include PIR insulation, which has increased by 10%, and ongoing pricing anomalies in CLS timber and ironmongery. The CLC statement is available here.
  • Liquefied natural gas (LNG) | The LNG industry is worried that new fees for Chinese-built ships docking at US ports will damage the industry and the American Petroleum Institute has written to the US administration warning that the rules will drastically increase the cost of transporting LNG. Currently there are no US-built ships capable of carrying LNG and no space at shipyards to build suitable vessels by the deadline of 2029.
  • British Steel had ended its redundancy consultation and will keep its two blast furnaces in operation after the Steel Special Measures Act was passed earlier this month and it secured the raw materials it needed over the weekend. 55,000 tonnes of blast furnace coke arrived from Australia on Saturday, and a shipment of 66,000 tonnes of iron pellets and 27,000 tonnes of iron ore fines is expected next week. The Act also meant that ministers took control of the company, so new leadership has been put in place.

Environment

  • Deep-sea mining | US President Donald Trump signed an Executive Order last week to fast-track a process to permit US-affiliated companies to mine the deep-seabed in Northern America’s international waters, despite the country not being a member of the International Seabed Authority. The Order seeks to expedite permitting US agencies to facilitate the commercial extraction of minerals like cobalt, nickel and manganese from deep-sea environments both with US waters and far beyond US national jurisdiction.
  • Climate targets | The Scottish government is dropping its key climate target to cut car use by 20% by the end of the decade. The aim was to reduce the number of kilometres travelled by car across the country to cut harmful emissions. However, car usage in Scotland has only fallen by 3.6% since before the Covid pandemic.

Friday to Friday

Price / Index Week %
change		 Annual %
change
FTSE 100 8,415.25 1.69 3.38
FTSE 250 19,609.69 1.87 -1.08
Nikkei 35,705.74 3.86 -5.88
CSI 300 3,786.99 0.39 5.66
S&P 500 5,525.21 4.59 8.34
Nasdaq 17,382.94 6.85 9.14
CAC 40 7,536.26 3.44 -6.82
Dax 22,242.45 4.89 22.47
$ per £ 1.3329 0.56 6.88
€ per £ 1.1712 0.40 0.36
Gold £/oz 2,493.44 -0.57 33.24
Brent Oil $/barrel 65.80 -3.18 -26.48

Weekly Summary

This week’s warning on the possibility of substandard materials being imported into the UK as a result of the trade war, which  could temporarily reduce prices reinforces the need to understand where imported materials come from and to ensure they are compliant and safe. The Construction Leadership Council urged the construction industry to collaborate closely with supply chain partners, a common theme from other years of disrupted trade.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst
Kishan Patel
Kishan Patel,
Research Analyst

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