Challenging Bank data

30 June 2021

There was some interesting data in the Bank of England’s recent Q2 summary of the reports from its 12 regional agents. This is based on discussions with at least 700 businesses from across the UK. 

It again shows the double-edged nature of the strong demand in construction and related markets like hire. 

First, on the positive side, companies involved in construction said that the building of new houses remains a strong market, with home improvement and repair and maintenance activity also positive between mid-April and early June. This echoes the many stories on the blog in which hirers say how busy they are serving small builder and landscapers. 

However, a less positive finding was that “private commercial work remained substantially weaker than a year ago, in particular for retail, hospitality, higher education and office developments.” 

Also, contacts reported “severe materials shortages, including for cement and timber", another trend highlighted earlier on the blog. Indeed, some of those responding were concerned that stockpiling is becoming an issue, putting more upward pressure on prices. 

Costs of certain materials were also reported to be rising, with only some companies able to pass these costs on, such as house builders and tradesmen involved in hoe improvements; others “had little scope to increase prices at a later stage,” such as those working on projects that had been awarded by tender. 

So while the overall picture remains positive, there are variations. This once again shows that, although aggregated data is useful for a general ‘macro’ overview, it’s still essential to focus on information that is specific to the markets that your business operates in.

Basically, you have to trust your own experience and judgment. 

Picture: Gerd Altmann/ Pixabay