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Recovery Is On the Horizon I Recovery Is On the Horizon


f the ‘roadmap’ goes to plan, non-essential shops will re-open on April 12th and the recent budget – thankfully – was if anything encouraging for the retail sector. So, we have positives ahead, helping to strengthen the pound and create a degree of recruiter optimism. The beginning of the year has undoubtedly been tough, however. GDP growth is the worst for centuries; the country has a £400bn COVID-19 bill and rising to a projected £700bn this year; and the latest ONS data points to a tough January for many retailers. Issues such as price rises in commodities – some as high as they have been in ten years - shortages of cardboard, and import / export freight costs only add to the challenge ahead. And the unemployment rate increased to 5.1% in the three months to December, which is the highest jobless rate since August 2016. With unemployment held


W W


Viewpoint from Will Jones, Chief Operating Officer of the British Home Enhancement Trade Association (BHETA)


hile some of the latest economic


statistics show some evidence of being slightly skewed by buying decisions being made ahead of BREXIT, in general the figures show a positive direction as the nation recovers from the impact of the first Covid- 19 lockdown. With retail volumes in growth for the sixth consecutive month and October 2020 GDP now 23.4% higher than its April 2020 low (albeit still 7.9% below February


statistics show some evidence of being slightly skewed by buying decisions being made ahead of BREXIT, in general the figures show a positive direction as the nation recovers from the impact of the first Covid- 19 lockdown. With retail volumes in growth for the sixth consecutive month and October 2020 GDP now 23.4% higher than its April 2020 low (albeit still 7.9% below February


hile some of the latest economic


down by the Job Retention Scheme, which is now supporting about four million jobs, that statistic is salutary in terms of future consumer spending. Having said that, the combined relief of spending on home-related products remains strong, and a budget which certainly did not penalise retail are both very welcome facts for the future. And another bonus - UK average house prices achieved another record high in December, which, combined with extremely high mortgage approvals – the largest number since 2007 - means that one of the biggest drivers of home enhancement is in good shape. So, here is the reality. While the impact of the current restrictions is not as large as with the first lockdown, retail sales volumes decreased by 8.2% in January when compared with December. The proportion of sales via online channels soared to 35.2% in January, the highest on record, showing, if further evidence were needed, the imperative to adapt. Despite some predictions, the Chancellor did not


Retail Sales Retail sales volumes decreased by 8.2% in January when compared with December due to tighter nationwide Covid-19 restrictions. Volumes were 5.5% lower than before the pandemic indicating that the impact of restrictions was not as large as April 2020 when sales fell by 22.2% compared with pre-pandemic levels. The proportion spent online soared to 35.2% in January, the highest on record; this compares with 19.5% reported in January 2020.


Gross Domestic Product (GDP) GDP increased by 1.2% in December, following a 2.3% decline in November, when there were more extensive restrictions to activity. December GDP is 6.3% below the levels seen in February. The production sector grew marginally by 0.2% in December but the construction sector acted as a drag on growth, falling by 2.9% following seven consecutive monthly increases.


recovery and put strain on ‘non-essential’ retailers but demand looks set to remain strong for home- related products through online channels and ‘essential’ shops.


The last months of 2020 saw the UK continue to recover from the Covid-19 first lockdown, with retail volumes growing for six consecutive months. All statistics linked to spending on the home have been resilient, with average UK house prices achieving a new record high in October of £245,000 and the most mortgage approvals in a month since September 2007. The January lockdown will stifle the wider


recovery and put strain on ‘non-essential’ retailers but demand looks set to remain strong for home- related products through online channels and ‘essential’ shops.


Mortgage Approvals The number of mortgage approvals for house purchases in the UK decreased to 103,000 in December from 105,000 in November. Approvals remained well above February’s pre-Covid level of 73,400. Recent strength in approvals has offset the significant weakness earlier in the year. After a record low of 9,400 in May – approvals totaled 818,500 in 2020, the largest number in one year since 2007.


Mortgage Approvals The number of mortgage approvals for house purchases in the UK increased to 105,000 in


Construction Output


January/February 2021 March/April 2021


HW-JAN21-PG07.indd 7


Retail Sales In November, retail sales volumes decreased by -3.8% when compared with October as many stores ceased trading following government guidance during the pandemic. Despite the monthly fall, overall sales remain above their pre-pandemic levels. The year-on-year growth rate in the volume of retail sales increased by 2.4%, with businesses suggesting that consumers had brought forward Christmas spending.


Gross Domestic Product (GDP) GDP estimates for October 2020 are subject to more uncertainty than usual as a result of the challenges we faced estimating GDP in the current conditions. October 2020 GDP is now 23.4% higher than its April 2020 low. However, it remains 7.9% below the levels seen in February 2020, before the full impact of the coronavirus pandemic.


Mortgage Approvals The number of mortgage approvals for house purchases in the UK increased to 105,000 in


Retail Sales In November, retail sales volumes decreased by -3.8% when compared with October as many stores ceased trading following government guidance during the pandemic. Despite the monthly fall, overall sales remain above their pre-pandemic levels. The year-on-year growth rate in the volume of retail sales increased by 2.4%, with businesses suggesting that consumers had brought forward Christmas spending.


Gross Domestic Product (GDP) GDP estimates for October 2020 are subject to more uncertainty than usual as a result of the challenges we faced estimating GDP in the current conditions. October 2020 GDP is now 23.4% higher than its April 2020 low. However, it remains 7.9% below the levels seen in February 2020, before the full impact of the coronavirus pandemic.


The last months of 2020 saw the UK continue to recover from the Covid-19 first lockdown, with retail volumes growing for six consecutive months. All statistics linked to spending on the home have been resilient, with average UK house prices achieving a new record high in October of £245,000 and the most mortgage approvals in a month since September 2007. The January lockdown will stifle the wider


2020), there are some positive indicators. Admittedly some of these measures precede the latest pandemic restrictions. We can already see November retail sales volumes decreasing by -3.8% compared to October because of Lockdown 2 and anecdotal evidence is suggesting that 2021 may well get off to a tough start due to the current situation. The other salutary output of the current statistics is that the number of payroll employees has fallen by 819,000 since February 2020. With overall sales remaining above their pre-pandemic levels, however, there is still a positive economic direction. But the key point for the housewares sector


2020), there are some positive indicators. Admittedly some of these measures precede the latest pandemic restrictions. We can already see November retail sales volumes decreasing by -3.8% compared to October because of Lockdown 2 and anecdotal evidence is suggesting that 2021 may well get off to a tough start due to the current situation. The other salutary output of the current statistics is that the number of payroll employees has fallen by 819,000 since February 2020. With overall sales remaining above their pre-pandemic levels, however, there is still a positive economic direction. But the key point for the housewares sector


talking trade talking trade


Roadmap Offers Prosperity to Housewares Industry Viewpoint from Will Jones, Chief Operating Officer of the British Home Enhancement Trade Association (BHETA)


Viewpoint from Will Jones, Chief Operating Officer of the British Home Enhancement Trade Association (BHETA)


talking trade


include the so-called ‘Amazon tax’ in his budget proposals so for the moment at least online remains in the ascendancy. While I believe that remodelling of good housewares retail business must be considered in the light of these figures, Government is giving some encouraging pointers. The extension of business rates holiday until June, with a discount scheme for the rest of the year, a ‘new restart grant’ of £6000 per premises for qualifying businesses and the fact that while corporation tax rises, it will only affect retailers with profits of £250,000 or more are all positives. And other helpful news - the furlough scheme is extended until the end of September with employees continuing to receive 80 per cent of their salary for hours not worked. Plus, the launch of the new Recovery Loan Scheme.


For further information, visit www.bheta.co.uk or contact the BHETA Member Services Team on u07946 078566


November, the highest level since August 2007 and well above market expectations of 82,500. The recent strength in approvals has almost fully offset the significant weakness earlier in the year.


Construction output fell by 2.9% in the month- on-month all work series in December, because of falls in both new work (3.8%) and repair and maintenance (1.5%); this is the first decline in monthly growth since April 2020 when it fell by a record 40.7%. The December level of output is 3.5% below the pre-coronavirus February level.


Purchasing Managers Index Purchasing Managers Index


The IHS Markit/CIPS UK Manufacturing PMI fell to 52.9 in January from 57.5 in December, well below market forecasts of 54. The reading pointed to the slowest growth in factory activity since June amid coronavirus lockdown restrictions. Lower levels of new orders, reduced employment and a swift depletion of pre-production inventories were the main factors.


Purchasing Managers Index


UK House Price Index UK average house prices increased by 8.5% over the year to December, up from 7.1% in November, to stand at a record high of £252,000; this is the highest annual growth rate the UK has seen since October 2014. Average house prices increased over the year in England to £269,000 (8.5%), in Wales to £184,000 (10.7%), in Scotland to £163,000 (8.4%) and in Northern Ireland to £148,000 (5.3%).


The IHS Markit/CIPS UK Manufacturing PMI increased to 57.3 in December from 55.6 in November. The reading pointed to the strongest expansion in factory activity since November 2017. New orders expanded at the fastest pace since August, supported by a temporary boost to purchasing ahead of the Brexit deadline, while stocks of purchases were accumulated to the greatest extent since April 2019.


Consumer Price Index


The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose 0.9% in the 12 months to January 2021, up from 0.8% to December 2020. Furniture and household goods,


HousewaresLive.net • HousewaresLive.net


The IHS Markit/CIPS UK Manufacturing PMI increased to 57.3 in December from 55.6 in November. The reading pointed to the strongest expansion in factory activity since November 2017. New orders expanded at the fastest pace since August, supported by a temporary boost to purchasing ahead of the Brexit deadline, while stocks of purchases were accumulated to the greatest extent since April 2019.


November, the highest level since August 2007 and well above market expectations of 82,500. The recent strength in approvals has almost fully offset the significant weakness earlier in the year.


Construction Output Construction output grew by 1.0% in the month- on-month all work series in October, because of increases in both new work (0.3%) and repair and maintenance (2.3%). The level of construction output in October was 6.4% below February 2020, with only infrastructure having recovered above this pre-lockdown level of output.


Construction Output Construction output grew by 1.0% in the month- on-month all work series in October, because of increases in both new work (0.3%) and repair and maintenance (2.3%). The level of construction output in October was 6.4% below February 2020, with only infrastructure having recovered above this pre-lockdown level of output.


is just how much purchasing linked to the home is standing up to all pressures. House prices are up to record levels, mortgage approvals are up – to the highest level since September 2007! While the January lockdown will of course be a challenge, online channels and shops deemed essential will continue to contribute massively to positive figures. In other words, we are seeing recovery, but


we are also seeing significant change in the economic structure we were used to before the pandemic – and the imperative is to adapt. For further information, visit www.bheta.co.uk or contact the BHETA Member Services Team on u07946 078566


restaurants and hotels, food, and transport had the largest upward contributions.


Reuters FX Analysis On 22nd February, Sterling closed at $1.41, it’s highest point since April 2018, as the dollar weakened globally. The Euro exchange was 1.16 EUR, an eight month high. 1 GBP = 1.16 EUR 1 GBP = 1.41 USD 22 Feb


Reuters FX Analysis The pound strengthened against the Dollar in recent months to $1.36 whilst the Euro rate has remained broadly flat around 1.10 Euro. 1 GBP = 1.10 EUR 1 GBP = 1.36 USD 7 Jan


UK House Price Index UK average house prices increased by 5.4% over the year to October 2020, up from 4.3% in September, to stand at a record high of £245,000; this is the highest annual growth rate the UK has seen since October 2016. Average house prices increased over the year in England to £262,000 (5.4%), Wales to £176,000 (5.8%), Scotland to £163,000 (6.0%) and Northern Ireland to £143,000 (2.4%).


UK House Price Index UK average house prices increased by 5.4% over the year to October 2020, up from 4.3% in September, to stand at a record high of £245,000; this is the highest annual growth rate the UK has seen since October 2016. Average house prices increased over the year in England to £262,000 (5.4%), Wales to £176,000 (5.8%), Scotland to £163,000 (6.0%) and Northern Ireland to £143,000 (2.4%).


Labour Market The UK unemployment rate increased to 5.1% in the three months to December. It remains the highest jobless rate since the three months to August 2016. Unemployment has been held down by the government’s Job Retention Scheme which is supporting about 4 million jobs, that is, one in five employees. The employment rate continued to fall to 75% while the number of vacancies rose by 64,000 to 599.000 in the three months to January.


Consumer Price Index Early estimates for November suggest that there is a slight drop over the month in the number of payroll employees in the UK. Since February 2020, the number of payroll employees has fallen by 819,000; however, the larger falls were seen at the start of the pandemic. The number of redundancies reached a record high in August to October although the weekly data show that while the level remains high there was a slight decrease in October.


Reuters FX Analysis The pound strengthened against the Dollar in recent months to $1.36 whilst the Euro rate has remained broadly flat around 1.10 Euro. 1 GBP = 1.10 EUR 1 GBP = 1.36 USD 7 Jan


Commodity prices In recent weeks the price of iron ore, which is used to make steel, surged by more than 85% to reach highs not seen in almost 10 years. The market price for copper, used in electrical wiring, has followed suit by climbing 80% since last March to reach a nine-year high. Meanwhile, nickel is trading close to 17-month highs and cobalt is at close to two- year peaks.


twitter.com/Housewaresnews • twitter.com/Housewaresnews


Commodity prices Commodity prices rose in October, with energy prices rising 0.5% and non-energy commodities rising 1.5%. Food commodities rose sharply, led by oils and meals (6.9%) and grains (3.4%). Precious metals fell 1.9% while base metals rose 1.3%.


housewareslive.net | 7 housewareslive.net | 7


04/02/2021 10:43


Labour Market The UK employment rate in the three months to September was estimated at 75.3%, 0.8 percentage points lower than a year earlier and 0.6 percentage points lower than the previous quarter. The UK unemployment rate in the three months to September was estimated at 4.8%, 0.9 percentage points higher than a year earlier and 0.7 percentage points higher than the previous quarter.


Commodity prices Commodity prices rose in October, with energy prices rising 0.5% and non-energy commodities rising 1.5%. Food commodities rose sharply, led by oils and meals (6.9%) and grains (3.4%). Precious metals fell 1.9% while base metals rose 1.3%.


Labour Market The UK employment rate in the three months to September was estimated at 75.3%, 0.8 percentage points lower than a year earlier and 0.6 percentage points lower than the previous quarter. The UK unemployment rate in the three months to September was estimated at 4.8%, 0.9 percentage points higher than a year earlier and 0.7 percentage points higher than the previous quarter.


Consumer Price Index Early estimates for November suggest that there is a slight drop over the month in the number of payroll employees in the UK. Since February 2020, the number of payroll employees has fallen by 819,000; however, the larger falls were seen at the start of the pandemic. The number of redundancies reached a record high in August to October although the weekly data show that while the level remains high there was a slight decrease in October.


is just how much purchasing linked to the home is standing up to all pressures. House prices are up to record levels, mortgage approvals are up – to the highest level since September 2007! While the January lockdown will of course be a challenge, online channels and shops deemed essential will continue to contribute massively to positive figures. In other words, we are seeing recovery, but


we are also seeing significant change in the economic structure we were used to before the pandemic – and the imperative is to adapt. For further information, visit www.bheta.co.uk or contact the BHETA Member Services Team on u07946 078566


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