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Tag: inflation

A bad time to bank on cutting costs to make up for cut-price bidding

A bad time to bank on cutting costs to make up for cut-price bidding

The latest pan-industry construction trade survey put together by the Construction Product Association paints a bleak picture for the months ahead, as falling workload and prices combine with cost inflation to squeeze firms’ already pressured profits. How ironic that seems after the industry enjoyed one of its best ever years of growth in 2010. But the trade survey suggests that profit margins have been under significant pressure since the credit crunch in the autumn of 2007. And it would seem…

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Construction folk take more than the fair share of pain as inflation rises and earnings fall

Construction folk take more than the fair share of pain as inflation rises and earnings fall

With all the fuss about inflation and the impact that it is having on families, I thought I might just take a look at what its impact might be on construction folk. So here are some very crude figures taken from the average weekly earnings non-seasonally adjusted data including bonuses and arrears. Average weekly earnings in construction have dropped 1.1% between November 2007 and November 2010 according to the latest official figures.

Warning signs over construction cost inflation

Warning signs over construction cost inflation

The latest construction survey put together by Markit for the buyers’ professional body CIPS suggested that there are growing signs of substantial increases in the input prices faced by construction companies in the UK. It reckoned that the rate of inflation was the fastest in seven months and above long-run series average. The survey panellists attributed this to the rise in raw material prices. I’m not sure how they work out with any great certainty the comparative rate of inflation, given the…

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A New Year a welter of New Challenges for Mr Shapps

A New Year a welter of New Challenges for Mr Shapps

Happy New Year and here is wishing fervently that it progresses far better than those reading the runes might suggest. For me the year has started encouragingly and for that I must congratulate Grant Shapps, our housing minister. In May when Shapps took the ministerial reins attached to the wild stallion that is housing I argued that the first big question he had to face down was whether he believes house prices at current levels are sustainable or not. In…

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Inflation – a reason to be cheerful or a cause for concern?

Inflation – a reason to be cheerful or a cause for concern?

The rate of inflation is important to construction at present, especially to those engaged in the housing market that might be wary of high inflation rates prompting increases in interest rates or deflation prompting prolonged falls in house prices. But it seems to me that people fall in reasonable proportions into three camps, those who fret about inflation rising, those who remain pretty relaxed and those who fret about deflation. So here is one graph that oddly might satisfy all sets of proclivities. There…

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10 things that might be causing weirdness in the construction output figures

10 things that might be causing weirdness in the construction output figures

Can we accept unquestioned the construction figures presented by the latest preliminary estimate of UK economic growth? To do so is to accept that construction is enjoying workloads at a level that just three years ago were close to pushing the industry’s capacity to its limits. What’s more the rate of growth being enjoyed by construction – 14% or so over six months – is seen by many who follow the numbers as astonishing and for some incredible. But before launching…

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Value of UK homes rose £125.7 billion in 2009

Value of UK homes rose £125.7 billion in 2009

Here is a figure I love to highlight – just for the craic. It seems to get people all hot under the collar for some reason. The Blue Book of national accounts shows the official estimate of the value of homes in the UK. The latest edition, out today, puts the figure for the end of 2009 at £4,048.3 billion against £3,922.6 billion in 2008. That is a rise of £125.7 billion. Mind you, if you apply a deflator – say that…

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Nationwide joins other indexes to show house prices falling

Nationwide joins other indexes to show house prices falling

It came as little surprise that the Nationwide house price survey should show a fall in July. And it showed a pretty significant fall of 0.5% on its seasonally adjusted series. It had been for many months among the more bullish of the indexes measuring inflation in the UK housing market, at a time when others were showing the market sliding backwards. But like most of the indexes, the Nationwide has had to draw big conclusions from a rather thinner…

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Are we on the edge of a second house price crash?

Are we on the edge of a second house price crash?

The big question after today’s release of the Halifax house price index is whether the market is heading for a protracted decline or whether prices will stabilise and hold or continue to creep up from the trough of a year or so ago. It must be said that today’s figures, which show the third in a straight set of monthly declines, fit the pattern expected given the recent movement in what might be regarded as leading indicators for house prices….

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Has the Office for Budget Responsibility screwed up the Stamp Duty figures?

Has the Office for Budget Responsibility screwed up the Stamp Duty figures?

I appreciate that Office for Budget Responsibility is taking flak at the moment for being “optimistic with the truth”, but I can’t help but chip in with yet another gripe. I have deep concern that it has made a huge fluff of the numbers for Stamp Duty Land Tax that could leave the Treasury billions short on its target for the revenue so much needed to close the deficit. We are being asked to believe that by 2014 the Treasury…

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