ECONOMIC SNAPSHOT


RETAIL REVIVAL IS A BIGGER ISSUE THAN THE FIGURES SUGGEST


The latest facts and figures from the British Home Enhancement Trades Association (BHETA) and what they mean for suppliers to the home improvement industry.


according to the official statistics but the feeling of uncertainty, given the news from some of the traditionally big names in retail, is dangerously close to overwhelming. Latest retail sales figures look ‘not too bad’ for our sectors. In August, the quantity bought increased by 0.3% when compared with the previous month, with increases across sectors like non- food at 2.8% and household goods at 4.5%. This seems particularly encouraging, given the extent to which the overall upturns in recent months have been attributable to sectors such as food and seasonal. Spending online unsurprisingly continued to increase to reach a new record proportion of all retailing at 18.2%. However, strong growth in department stores also reached a record proportion at 18.4%. Taking the wider picture into


B consideration, house HETA home


impr ovement and garden sector director Paul Grinsell says: “Overall not


a bad month resurgence would create.


Maybe it’s time that the powers that be had a look at how we can achieve a level playing field for both bricks and mortar and online retail in terms of business rates, taxation and rent. That way, perhaps, we can ensure that all parties have a fair crack at revitalising the overall home enhancement market to the benefit of everyone.


Consumer Price Index – August 2018 Rising


prices for a range of


recreational and cultural goods and services, transport services and clothing produced the largest upward contributions to the change in the rate between July and August 2018. Partially offsetting downward contributions came from furniture and household goods, and telecommunications; prices for these rose between July and August 2018 but by less than a year ago. The Consumer Prices Index (CPI) 12-month rate was 2.7% in August 2018, up from 2.5% in July 2018.


price


improvements are there, albeit sluggish, construction output is improving a little and commodity prices are down a little, so again, figures are marginally positive. But now the reality check! It’s


a sad consequence of


the pressures on today’s retail environment that when you look around the BHETA membership, there aren’t many of our supplier members who have not been impacted in some way by recent events at Homebase and House of Fraser. Regardless of any short- term benefit that immediate retail competitors may gain, for most companies in the market, the most positive outcome for everyone is a successful rebirth for these erstwhile retail giants. There is considerable potential support


from suppliers


for just that outcome, if only for the overall positive impact that such a


www.diyweek.net


Retail Sales – August 2018 In August 2018, the quantity bought increased by 0.3% when compared with the previous month, with increases across all sectors except food, clothing and petrol. The month-on-month


growth


rate in the quantity bought in food stores at negative 0.6% and clothing stores at negative 1.9% was offset by strong growth in other non-food stores at 2.8% and household goods stores at 4.5%. The last three months of summer


from June to August 2018 saw an increase in the quantity bought at 3.4%, with food and household goods stores doing well in the warm weather when compared with the previous summer, while non-store retailing continued to show strong growth. Spending online


continued to


increase to reach a new record proportion of all retailing at 18.2%;


with strong growth in department stores also reaching a record proportion at 18.4%.


Mortgage approvals – August 2018


Sluggish house prices and the Bank of England rate rise have contributed


to an increased


number of mortgage approvals in August 2018. That is according to data from the latest Mortgage Monitor from chartered surveyors, e.surv, which showed approvals were up by 2.7% in August compared to July. Although this is 0.7% lower than August last year, the 66,543 mortgages approved in August exceeded expectations because unseasonably hot weather generally causes a slowdown in the market. But, the


favourable housing


market, where prices were not rising as fast as previously, was likely to have played a role tempting in more buyers too.


House Price Index – July 2018 Average house prices in the UK have increased by 3.1% in the year to July 2018 (down slightly from 3.2% in June 2018). This is the lowest UK annual rate since August 2013 when it was 3.0%. The annual growth rate has slowed since mid-2016 and has remained under 5%, with the exception of October 2017, throughout 2017 and into 2018. This slowdown in UK house price


growth over the past two years is driven mainly by a slowdown in the south and east of England. The lowest annual growth was in London, where prices decreased by 0.7% over the year, down from an increase of 0.3% in the year to June 2018.


UK Labour market – May-July 2018


Estimates from the Labour Force Survey


show that, between


February to April 2018 and May to July 2018, the number of people in work was little changed, the number of unemployed people decreased but the number of people aged from 16 to 64 years not working and not seeking or available to work (economically inactive) increased. There were 32.40 million people in work, little changed compared with February to April 2018 but 261,000 more than for a year earlier.


Construction Output – July 2018 Construction output continued to recover following a relatively weak start to the year, increasing by 3.3% in the three months to July 2018. The three-month on three-month


growth in July 2018 was driven by growth in both repair and maintenance, and all new work, which increased by 5.3% and 2.3% respectively. Construction output also grew in the month-on-month series, increasing by 0.5% in July 2018, driven predominantly by a 4.0% increase in new private housing work.


Commodity Prices – August 2018 Commodity prices mostly declined in August, with energy and non- energy commodities falling 1.7%. Agriculture prices were also weak (down 1.8%), led by a 5.2% drop in beverages. Grains, however, bucked the trend by rising 4.3%. Precious and base metals fell around 3%.


Foreign Exchange analysis – Reuters September 25 The euro struggled on Tuesday, September 25, despite European Central Bank president Mario Draghi’s comments about “relatively vigorous”


inflation


in the previous session, while the dollar paused before the U.S. Federal Reserve’s policy meeting.


1 GBP = 1.11 EUR 1 GBP = 1.31 USD


12 OCTOBER 2018 DIY WEEK 11


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