Focus on skills

Economic Week In Review | Issue 484 | 16 June 2025

UK construction and property

  • Construction output grew by 0.9% in April bucking the trend of the wider economy which shrank over the same time-period. The better-than-expected rise came from both new work and Repair and Maintenance (R&M), which grew by 1.4% and 0.3%, respectively. The main contributors to the monthly increase were infrastructure new work and private housing R&M, which grew by 2% and 1.5% respectively.
  • Collaborative contracts | The NEC suite of construction contracts has expanded following the acquisition of the Association of Consultant Architects’ (ACA). The Framework Alliance Contract (FAC-1) and the Term Alliance Contract (TAC-1), which have supported more than £45bn of construction and infrastructure work globally, have been transferred to the commercial arm of the Institution of Civil Engineers and publisher of NEC4. The deal consolidates the UK’s leading collaborative frameworks under one development and publishing platform. The update NEC offering now includes: a single platform for NEC4, FAC -1 and TAC-1, harmonised drafting across contract types and integrated training and implementation support.
  • AI in construction | The government has launched a new AI tool, ‘Extract,’ which was developed by its Incubator for Artificial Intelligence and designed in collaboration with Google to speed up the planning process. The tool will reduce the number of hours planners spend looking at documents, as it will scan policy documents and maps, extract useful information such as development rights, addresses, dates, etc., and trace boundaries on the map around specific areas related to the information. During trials, Extract digitized planning records, including maps, in just three minutes—compared to the one to two hours it would take a person to do it manually. The nationwide launch of Extract is expected by spring next year, following trial tests across Hillingdon, Nuneaton & Bedworth, and Exeter councils..
  • Construction regulator | The government has pledged to release details later this year of what a single construction regulator could look like. The concept of a single regulator that reports to the Secretary of State and oversees a wide range of industry functions, including product regulation, fire testing methods, contractor licensing, research, and information gathering, was founded by the outcome of the Grenfell Inquiry Phase Two report.
  • ‘Green book’ | The Treasury’s changes to the Green Book will change the way projects are appraised and create a a more place-based business case approach, after concerns that it contributes to regional disparities.

Global economy

  • Investment | Global investors have moved money from U.S. equities into European and emerging market assets, as concerns mount over U.S. fiscal policy, rising debt and the risk that trade tariffs will trigger a recession. The US saw outflows of $24.7bn in May, the largest in a year. In contrast, European funds attracted $21bn in May, lifting year-to-date inflows to $82.5 billion, the highest in four years. European markets have outperformed the US so far this year, helped by lower interest rates and optimism over Germany’s one trillion-euro stimulus plan.
  • German economy | After two consecutive years of contraction, the Kiel Institute for the World Economy (IfW) expects the German economy to grow 0.3% this year. The optimism increases the forecast for Europe’s largest economy to 1.6% growth from the previous forecast of 1.5% in 2026.

UK economy

  • Unemployment rose to a four-year high as businesses balance higher national insurance contributions and the minimum wage rise. The number of vacancies has fallen and the number of people claiming jobless benefits has increased which suggests the jobs market is cooling. Average wage growth between February to April fell by 0.3% from the previous three-month period, the lowest since July to September last year. However, generally, wages are rising faster than inflation.   
  • Economic output | Britain’s economic output contracted in April as GDP fell by 0.3%, the biggest monthly drop since October 2022. The fall was attributed to the shockwaves from U.S. President Donald Trump’s announcement of wide-ranging tariffs. A decline in real estate and legal activities contributed to 0.2% of the fall in total output in April, driven by the end of a temporary tax break on house purchases. These figures represent a marked change from Q1 2023, where the British economy expanded by 0.7%, faster growth than was seen in other countries.
  • International investment | Australian pension fund Aware Super has announced that it plans to invest billions of pounds in the UK, citing “significant” opportunities in Europe as the US market becomes more uncertain.

Materials, commodities and currencies

  • Low-carbon road materials | North Lanarkshire Council, with Amey and technology partner Safetytech Accelerator, has launched an initiative called the Barriers to Decarbonising Roads Sandbox which looks at ways to help small businesses overcome barriers to using low-carbon road materials. It allows eight SMEs to trial low-carbon products in a controlled environment across seven projects.
  • Dollar | The US currency has fallen against a basket of peers after President Trump told reporters that he was writing to trading partners outlining new reciprocal tariffs as the end of the 90-day pause nears.
  • Oil | Traders are braced for a period of volatility after tensions in the Middle East escalate. However, many think that abundant supply in the market may mean that the tension may not impact prices.
  • Shipping | The UK Navy has issued a rare warning that tensions in the Middle East could impact ships that pass through the Strait of Hormuz. UKMTO, which acts as a liaison between the navy and commercial shipping said “Vessels are advised to transit the Arabian Gulf, Gulf of Oman and Straits of Hormuz with caution.” The Strait sees roughly 26% of the world’s oil trade pass through it, and approximately 20% of liquified natural gas.

Environment

  • Climate change | Researchers have urged for stricter regulations on polluting construction equipment following findings that indicated the industry was the primary source of hazardous black carbon emissions in a central London area. The report highlighted that the ULEZ for regular road traffic enforces stricter standards compared to those applied to non-road machinery. It concluded that enhanced regulations for NRMMs are essential to further enhance air quality in London, comply with WHO urban air quality guidelines, and address public health issues.
  • UN treaty | The British government has announced plans to introduce legislation by year-end to ratify the UN High Seas Treaty. This treaty would establish the first legally binding framework for the protection of international waters, which constitute nearly two-thirds of the world’s oceans but currently lack effective regulation. The High Seas Treaty was endorsed by 193 nations two years prior, but it will only take effect once 60 countries have ratified it. Additionally, the treaty outlines the mechanisms for countries to share technology, newly discovered resources, and funding. This would require decisions to be made collectively through negotiations, rather than by individual nations acting independently.

Friday to Friday

Price / Index Week %
change		 Annual %
change
FTSE 100 8,884.92 0.79 9.06
FTSE 250 21,173.33 0.08 5.23
Nikkei 37,834.25 0.25 -2.53
CSI 300 3,864.18 -0.25 9.11
S&P 500 5,976.97 -0.39 10.04
Nasdaq 19,406.83 -0.63 9.71
CAC 40 7,684.68 -1.54 2.42
Dax 23,516.23 -3.24 30.63
$ per £ 1.3593 0.46 7.17
€ per £ 1.1763 -0.92 -0.78
Gold £/oz 2,529.40 3.36 37.54
Brent Oil $/barrel 74.23 11.67 -10.15

Weekly Summary

The announcements in the Spending Review will be welcomed by the industry as a pipeline of work with significant capital spending, especially when twinned with the Infrastructure Strategy which will be released this week. However, attention needs to be given to increasing the sector’s capacity to deliver work, growing the workforce and its skills.

Author contact

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

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