Seeds of growth?

Economic Week In Review | Issue 512 | 19 January 2026

UK construction and property

  • National site standards | A new National Site Standard for Female Operatives has been launched at the House of Lords. It aims to improve safety, welfare, and inclusion for women on construction sites and sets out 11 key requirements to support and protect women working across UK construction sites.
  • Tender prices | The BCIS reported that tender prices increased by 2.5% in 2025, and it forecasts a further 17% increase in tender prices over the next five years, while new work output is expected to rise by 16%. Its panellists identified high construction costs, a shortage of white-collar workers, and inconsistent pipelines as key issues, alongside increased data centre demand creating resource shortages and cost pressures for M&E contractors.
  • Construction output | UK construction output dropped by 1.1% in the three months to November 2025 compared to the previous quarter, marking the largest quarterly fall since March 2023, as pre-budget uncertainty and structural challenges hit UK construction output hard. Both new work and repair and maintenance declined, with private commercial new work seeing a 4.5% fall, while private housing repair dropped 3.7%. In November alone, construction output fell by 1.3%.
  • Scottish infrastructure strategy | The Scottish government has launched its draft 10-year strategy and investment pipeline alongside the 2026-27 Scottish Budget covering 2027-2037. The strategy focusses on three key outcomes – the environment, economic growth and building sustainable places and is structured around three “enablers” – public assets, place-making and private investment.

Global economy

  • China’s trade surplus rose to a record of almost $1.2 trillion in 2025, up from $992 billion in 2024, as exports to other countries made up for slowing shipments to the US. Economists expect exports will continue to support China’s economy this year, despite trade friction and geopolitical tensions.
  • Germany’s economy grew by 0.2% in 2025, marking a modest recovery after two consecutive years of recession, according to the Federal Statistic Office. Key drivers of grow included increased household consumption and government spending which slightly outpaced consumer spending – boosted by higher defence spending. However, overall investment declined by 0.5% year-on-year.
  • Tariffs | Canada has agreed to cut its 100% tariff on Chinese EVs in return for lower tariffs on Canadian farm products. Canada’s Prime Minister Mark Carney said there would be an initial cap of 49,000 vehicles on Chinese EV exports to Canada, growing to 70,000 over five years.
  • Global economy | The World Bank’s semi-annual Global Economic Prospects report shows that global output growth will slow slightly to 2.6% this year from 2.7% in 2025, before edging back to 2.7% in 2027. The forecasts are a slight improvement over forecasts from last June, with the global economy proving more resilient than expected. However, the report highlighted that a quarter of developing countries are poorer than they were in 2019, before the COVID pandemic, with growth expected to slow to reduce extreme poverty. According to the World Bank, the 2020s are on track to be the weakest decade for global growth since the 1960s if current forecasts hold, with growth gains concentrated in wealthier countries.

UK economy

  • Economic growth |The UK economy grew by 0.3% in November, outperforming forecasts of 0.1% despite uncertainty surrounding Chancellor Rachel Reeves’ upcoming budget. November’s growth marks a rebound from October’s 0.1% contraction.
  • UK FDI | According to a new report by McKinsey, the UK has risen in global FDI rankings, driven primarily by strong growth in AI and clean energy sectors. Inflation-adjusted inflows averaged about $85 billion a year, 40% higher than before the COVID pandemic and stronger than the overall global rise of 20%. The UK was the world’s third-largest destination for newly announced FDI projects between 2022 and 2025, behind the US and India, up from fourth place in 2015-19.

Materials and commodities

  • Steel | Chinese steel exports hit a record monthly high in December, fuelled by front-loading driven by Beijing’s announcement of an export license required for shipments from 2026 in order to regulate steel exports. Robust shipments have sparked a growing protectionist backlash worldwide.
  • Bricks and concrete block deliveries fell by 6.1% and 11.5%, respectively, in November 2025 compared to November 2024. Brick deliveries between January 2025 and November 2025 were 6.2% higher than in 2024, but still 25% below 2022 levels and even lower than 2020 pandemic levels.
  • Fused alumina | The European Commission has imposed anti-dumping measures on imports of fused alumina from China, aiming to strengthen the EU’s industrial autonomy. The anti-dumping duties range from 88.7% to 110.6% on Chinese fused alumina imports, with the EU also introducing a duty-free tariff rate quota to safeguard industrial needs.

Environment

  • Coal power | Coal-fired power generation fell in both China and India in 2025, the first time in more than 50 years. The drop occurred despite rising electricity demand in both countries because of record growth in clean energy, which was large enough to meet demand increases.
  • Carbon markets |The European Union and Britain will begin negotiations to link their carbon emission trading systems (ETS). Linking the systems would allow UK companies to avoid the EU’s new carbon border tariff on carbon-intensive imports.
  • Climate change | 2025 was the third-warmest year on record, according to the UK Met Office. The global average temperature in 2025 was more than 1.4 degrees above pre-industrial levels of the late 1800s, with the continued warmth bringing the world closer to breaching the international target to try to limit the rise in global temperature to 1.5 degrees above pre-industrial levels.

Friday to Friday

Price / Index Week %
change		 Annual %
change
FTSE 100 10,235.29 1.09 20.34
FTSE 250 23,069.10 0.14 12.00
Nikkei 53,936.17 3.84 40.27
CSI 300 4,731.87 -0.57 24.12
S&P 500 6,940.01 -0.38 15.73
Nasdaq 23,515.39 -0.66 19.79
CAC 40 8,258.94 -1.23 7.12
Dax 25,297.13 0.14 21.02
$ per £ 1.3381 -0.23 9.86
€ per £ 1.1537 0.08 -2.57
Gold £/oz 3,435.45 2.11 54.59
Brent Oil $/barrel 64.13 1.25 -20.62

Weekly Summary

 

Tariffs and growth seem to be back in the news this week. President Trump has increased the threat of tariffs as tensions surrounding Greenland intensify, while Prime Minister Keir Starmer has warned that a further trade war is not in anyone’s interests. Separately, the UK economy rebounded somewhat in November, posting stronger-than-expected growth; however, some of this is due to the recovery of vehicle manufacturing following the outage at Jaguar Land Rover the previous month. Yet, construction output still slowed, suggesting that despite supporting policy and targets, the rebound has not yet taken hold.

Author contact

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

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