Price increases?

Economic Week In Review | Issue 523 | 07 April 2026

UK construction and property

  • Construction contracts | The Joint Contracts Tribunal (JCT) will continue to provide access to its withdrawn 2016 contract suite until 31 December 2026. This decision aims to assist construction projects that have already commenced, or are set to begin, with the 2016 forms, even though the JCT 2016 Edition was officially withdrawn on 31 March 2026.
  • Construction activity increased in the second half of 2025, especially among smaller builders, with growth led by repair, maintenance, and improvement work, followed by housebuilding, as reported by a joint survey from the Federation of Master Builders and the Chartered Institute of Building. Despite this positive trend, the survey highlighted that recovery was significantly limited by a persistent skills shortage, which emerged as the main obstacle to ongoing growth. Carpenters and bricklayers continued to be the most difficult trades to recruit, and companies also faced challenges finding individuals with expertise in building safety, sustainable construction, and new technology.
  • Project Portfolio | The National Infrastructure and Service Transformation Authority (NISTA) has reduced the UK Government Major Projects Portfolio (GMPP), reducing it from 213 projects to 81 after a comprehensive strategic review. NISTA now requires that projects meet three specific criteria: they must align with a key government priority, have a total cost exceeding £1bn, and be among those that would gain the most from central oversight and expert guidance. Most major civil engineering and nationally significant projects continue to be included in the portfolio.

 

Global economy

  • US employment | The US labour market showed a strong recovery in March 2026, creating more jobs than anticipated even with rising geopolitical uncertainty. In March, 178,000 jobs were added, surpassing economists’ forecasts. The unemployment rate dropped to 4.3%, indicating ongoing strength in hiring despite broader economic headwinds. Analysts noted that the rebound was partly driven by the resolution of healthcare strikes, which had depressed employment numbers in February, but job growth was also seen in other sectors.
  • Eurozone growth | The S&P Global eurozone composite PMI dropped to 50.7 in March from 51.9 in February, signalling a slower rate of growth. This slowdown was influenced by rising energy costs and supply chain disruptions linked to the conflict in the Middle East. The service sector showed minimal growth, while manufacturing output continued to rise. However, manufacturers faced a record monthly increase in input costs, which placed significant pressure on margins. Employment declined, and business confidence weakened, leading to concerns about future investment and hiring if uncertainty continues.

 

UK economy

  • Manufacturing | In March, UK manufacturers experienced a significant rise in cost pressures, as factory input prices saw their largest month-on-month increase since October 1992. This was mainly due to higher oil and gas prices, increased transport and freight costs, and major shipping disruptions related to the Middle East conflict. Output prices also climbed at their fastest rate in nearly a year, showing that manufacturers are passing more of these costs on to customers. Overall, S&P Global’s UK Manufacturing PMI for March dropped to 51 from February’s 51.7, signalling that growth in new orders has slowed. S&P Global noted that the decline in output was mainly due to supply challenges rather than a sharp fall in demand.
  • Business rates | Make UK, the industry body representing manufacturers, has warned that business rates changes that come into effect this month will cost manufacturers an extra £940m a year. November’s Budget introduced a surcharge on buildings of a rateable value of more than £500,000.

Materials and commodities

  • Supply-chain disruptions | While the majority of UK construction materials are sourced locally or from Europe, the ongoing conflict in the Middle East has caused disruptions. The Construction Leadership Council (CLC) notes that increasing energy and fuel costs are directly impacting manufacturing, transportation, and material prices. Additionally, imports of wall and floor tiles, exterior porcelain, and sandstone from India have been affected by gas shortages, which have halted production. Alternative products from UK or EU suppliers are available, but they are expected to be much more costly. Despite manufacturers streamlining production to boost output, concrete plain roof tiles are likely to remain in limited supply throughout the year. Shipping challenges are also intensifying the situation, as rerouting ships from East Asia around the Cape of Good Hope has driven up container costs.
  • Aluminium | Emirates Global Aluminium (EGA) has indicated that aluminium production at its Al Taweelah facility in Abu Dhabi may require up to 12 months to return to full capacity, after experiencing substantial damage from Iranian strikes.
  • Section 232 tariffs | US President Donald Trump has revised his national security tariffs on steel, aluminium, and copper imports. The main tariff rate for these metals remains at 50%, but it is now calculated based on the price paid by U.S. customers rather than the declared customs value. This change is designed to prevent some importers from under-reporting the value of their imports. The U.S. will also lift the 50% tariff on steel, aluminium, and copper derivative products if their metal content is below 15% by weight. Tariffs on certain industrial and grid equipment with higher metal content will be reduced to 15% until 2027 to encourage industrial development. Items containing more than 15% metal will face a 25% tariff on the total import value, while products manufactured abroad entirely from U.S. metals will be subject to a 10% tariff.
  • Oil premiums | Spot premiums for US WTI crude have reached record highs, as refiners in Asia and Europe actively compete for supply to offset reduced Middle Eastern oil shipments. This sharp rise in crude prices is increasing costs and deepening losses for refiners across both regions, placing significant strain on companies, including state-owned enterprises that must continue producing fuel to support national security. In Europe, offers for WTI Midland delivered to the region rose to a record premium of nearly $15 per barrel over dated Brent last Thursday.

Environment

  • Renewable power | In 2025, Britain achieved a new milestone by generating 52.5% of its electricity from renewable sources—the highest proportion ever recorded. This growth was primarily driven by offshore wind, which increased by 6.6% as additional capacity became available, along with contributions from solar power and bioenergy. Although renewables reached a record high, gas-fired generation also rose by 4.7%, with gas continuing to be the largest single source of electricity, accounting for 31.5% of the total supply.
  • Environmental codes | China has enacted its first comprehensive Ecological and Environmental Codes, representing a significant step forward in strengthening environmental governance and integrating ecological protection into the nation’s legal framework. Approved on 31 March 2026 and set to take effect on 15 August 2026, this legislation supports China’s 2060 carbon neutrality objectives. It addresses pollution control, green development, and biodiversity, introduces more stringent penalties, and tackles climate-related risks.

 

Friday to Friday

Price / Index Week %
change		 Annual %
change
FTSE 100 10,436.29 4.70 29.56
FTSE 250 21,642.30 3.23 17.84
Nikkei 53,123.49 -0.47 57.26
CSI 300 4,440.79 -1.37 15.00
S&P 500 6,582.69 3.36 29.73
Nasdaq 21,879.18 4.44 40.36
CAC 40 7,962.39 3.38 9.45
Dax 23,168.08 3.89 12.24
$ per £ 1.3300 -0.29 2.53
€ per £ 1.1500 -0.65 -2.34
Gold £/oz 3,544.49 4.58 50.49
Brent Oil $/barrel 109.03 3.52 66.25

Weekly Summary

The conflict in the Middle East has taken its toll on UK manufacturers according to the latest S&P Global UK Manufacturing PMI, with manufacturers experiencing significant rises in input costs along with weaker growth in new orders.

NISTA has reduced the UK GMPP with an aim to speed up delivery, target specialists’ expertise and have more centralised oversight. Projects that have exited the GMPP remain equally important; however, these are cases where NISTA determined that direct monitoring was not as essential, enabling a more flexible approach to supporting these projects.

 

 

Author contact

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

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