Here to stay, but...

Economic Week In Review | Issue 501 | 13 October 2025

UK construction and property

  • Construction output | Construction PMI improved to 46.2 in September, from 45.5 in August. It is the highest reading in three months, showing that activity is still contracting but at a slower pace. New orders and employment fell for the ninth consecutive month, the longest job-shedding streak since the pandemic.
  • Building costs | According to the BCIS, construction costs are forecast to rise by 15% over the next five years, with tender prices expected to climb 16% over the same period. The BCIS forecast also predicts that new work output will grow by 18% between 2025 and 2030.
  • Building delays | A Construction Plant-Hire Association (CPA) survey of its members found that schemes going through Gateway 2 have been delayed by up to 40 weeks, compared to the intended two-week approval timeline. This has delayed more than 150 high-rise residential construction projects across the UK, most acutely in London, where more than 60% of affected schemes are located.
  • Administrations | September 2025 saw 32 construction administrations, matching February’s peak and pushing the year-to-date total to 223, surpassing the 208 recorded in the same period of 2024.
  • Margins | According to Construction News’ CN100 index, average margins among leading contractors have risen above pre-pandemic levels to 2.7%.

Global economy

  • Germany’s economy is expected to grow by 0.2% this year and increase on April’s forecast of stagnation, after shrinking in both 2024 and 2023. Growth is expected to improve to 1.3% in 2026 and 1.4% in 2027 with much of the growth momentum coming from the special fund set up to overhaul infrastructure and extra spending on defence driven by the loosening of Germany’s tough debt rules allowing for greater borrowing.
  • Merchandise trade | The World Trade Organization (WTO) predicts that merchandise trade will grow by 2.4%, up from 0.9% as recently as August, driven by an unexpectedly strong first half due to rising AI-related purchases. Forty-two percent of global trade growth comes from AI-related goods, which is much higher than their 15% share in world trade. Front-loaded imports in the U.S. over tariff fears and robust developing-world trade also contributed to the increased prediction. However, the WTO has lowered predictions for 2026 to 0.5%, down from 1.8%.
  • Port fees | China has imposed port fees on U.S.-owned vessels docking in the country in response to the American government’s planned port fees on Chinese ships. Each vessel would be charged no more than five times a year, with both countries charging $50 to $56 per net ton for each voyage.
  • IMF warning | The head of the International Monetary Fund has warned that whilst the global economy is holding up well against shocks, it needs to “buckle up” as “uncertainty is the new normal, and it is here to stay”.

UK economy

  • Borrowing | The ONS has found that government borrowing in the previous and current fiscal years was a combined £2 billion lower than previously reported after a value-added tax receipt data error was found.
  • Golden rule | At their annual conference, the Conservatives have announced plans for a golden rule whereby government savings will go towards tax cuts and deficit reduction. Along with the golden economic rule, the Conservatives announced the abolition of stamp duty on primary residences if elected.

Materials and commodities

  • Steel | The EU is proposing to reduce tariff-free quotas for imports to 18.3 million tonnes a year – a 47% reduction from 2024 levels – beyond which the new 50% tariff will apply. The new measure will come into force early next year but will first need to be approved by the majority of EU member states and the European Parliament.
  • Rare earth materials | New curbs on exports of rare earths and related technologies from China now require foreign companies to obtain special approval to export items that contain even small traces of rare earth elements sourced from China.
  • Energy | Great Britain’s National Energy System Operator warned of potential “tight days” for energy supply this winter, with imported electricity from Europe potentially used “when required” to power homes and businesses, despite reporting the strongest electricity margins since 2020.

Environment

  • Renewables | According to the IEA the global capacity in renewable energy generation is expected to double by 2030. Solar PV is expected to account for 80% of the increase in the world’s renewable capacity over the next five years with wind power expected to double over the same time period. This year renewable energy overtook coals as the largest source of electricity generation for the first time ever in the initial six months of 2025 with data analysed from 88 countries, which together account for 93% of global electricity demand.
  • Environmental crimes | The International Union for Conservation of nature (IUCN) has adopted a landmark resolution at the 2025 IUCN World Conservation Congress aimed at strengthening global efforts to prevent and combat environmental crimes. The resolution targets crimes such as wildlife trafficking, illegal logging, irresponsible mining, overfishing and pollution.

Friday to Friday

Price / Index Week %
change		 Annual %
change
FTSE 100 9,427.47 -0.67 14.22
FTSE 250 21,801.84 -1.78 4.99
Nikkei 48,088.80 5.07 21.42
CSI 300 4,616.83 -0.51 18.77
S&P 500 6,552.51 -2.43 12.68
Nasdaq 22,204.43 -2.53 21.05
CAC 40 7,918.00 -2.02 4.49
Dax 24,241.46 -0.56 25.12
$ per £ 1.3340 -1.04 2.06
€ per £ 1.1487 0.10 -3.84
Gold £/oz 3,008.00 4.29 47.95
Brent Oil $/barrel 62.73 -2.79 -20.47

Weekly Summary

The warning from the IMF that we should “buckle up” as uncertainty is here to stay sounds extreme; however, in reality, this is what we have been dealing with in construction for ten years. It is the reason this publication exists, and over the years, we’ve tracked construction becoming much better at dealing with various types of uncertainty by focusing on what we can control and tracking what we can’t.

Author contact

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

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