ECONOMIC SNAPSHOT


MEANWHILE IN THE REAL WORD


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


observers are going to show much surprise about fluctuations in the value of Sterling against both the Dollar and Euro, especially when they are attributed to the to-ing and fro-ing in Westminster over the Brexit deal – or ‘no deal’ as the case may be. So, for a more valid and valuable insight into the economic situation, it’s probably preferable to focus attention on other things. Namely, statistics that reflect peoples’ real lives and secondly how real people and real businesses are actually feeling about the economic situation.


B


An increasingly-positive performance in construction is usually good news for the home improvement and enhancement industries, as


its success can


ultimately lead to consumers being stimulated to invest in their homes. It is therefore good to note that the combined level or new work and repair and maintenance reached £13,995 million last autumn – a record high since the monthly records began in January 2010. Back in retail, the figures do not look so positive for autumn / winter, but we do have to remember that the amazing summer had such a positive impact that


declines


highs were probably inevitable. So, what about the instincts of the industry?


BHETA held one of its


regular credit forums not so long before Christmas and, interestingly, it was the


best attended could argue that event


ever, with 20 DIY and housewares suppliers around the table. While cynics


it’s the


challenging nature of the times that motivates such a turn out, as finance directors do their utmost to find out the latest on debtor days - who is ‘on stop’ and the like - the general conversation was, in fact, more upbeat.


Inevitably, certain retail names were mentioned - as they always


12 DIY WEEK 14 JANUARY 2019 HETA home


im pr o vem en t and garden sector director Paul Grinsell says: “Just at the moment, few


are - but very much in the context of starting or restarting relationships in the wake of new investments. The talk was all about mutual support yielding mutual benefit and the overall conclusion was tha,t while times might still be challenging, business was actually ‘OK’. Potentially hard work, but it was definitely still rewarding.


After all,


sales will certainly go somewhere, even if not always to the same places as used to be the case. Maybe there are times when some ‘gut feel’, based on real world experience, has more to tell us than official reports or media scare stories.


Consumer price Index - October 2018


The large downward contributions to the change in the 12-month rate came from food and non-alcoholic beverages, clothing and footwear, and some transport elements were offset by upward contributions from rising petrol, diesel and domestic gas prices.


contributions in


the


Other smaller upward came


miscellaneous goods and


services, recreation and culture, and communication sectors.


The Consumer Prices Index (CPI) 12-month rate was 2.4% in October 2018, unchanged from September 2018


from those


Retail Sales - October 2018 In the three months to October 2018, the quantity bought in retail sales increased by 0.4% when compared with the previous three months; a slowdown to growth when compared with the strong summer sales, which reached a high of 2.3% in the three months to July. In October 2018, the quantity bought fell by 0.5% when compared with September 2018, with a strong decline of 3.0% in household goods stores following a particularly strong August and September. The year-on-year average store price for fuel continued to increase in October 2018 to 11.4%; this is the 26th consecutive month to show an increase.


from items Online sales as a total of all


retailing increased to 18.0% from the 17.7% reported in September 2018, with textile, clothing and footwear stores continuing a record proportion of online sales at 18.2%.


Mortgage Approvals - October 2018 Gross mortgage lending across the residential market in October was £25.5billion; some 5.6% higher than last October. The number of


earlier (75.0%). The unemployment rate was 4.1%, slightly higher than for April to June 2018 but lower than for a year earlier (4.3%).


mortgages


approved by the main high street banks in October was 4.1% lower than last October; although approvals for house purchase were 3.6% higher, remortgage approvals were 13.5% lower and approvals for other secured borrowing were 1.3% lower.


House Price Index - September 2018 Average house prices in the UK increased by 3.5% in the year to September 2018, up from 3.1% in August 2018. However, over the past two years,


there has been a slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England. The lowest annual growth was in London, where prices fell by 0.3% over the year, up from a fall of 0.6% in the year to August 2018.


Labour Market - July-September 2018


Estimates from the Labour Force Survey show that, between April to June 2018 and July to September 2018, the number of people in work and the number of unemployed people both increased but the number of people aged from 16 to 64 years not working and not seeking nor available to work was little changed. There were 32.41 million people in work, 23,000 more compared with April to June 2018 and 350,000 more than for a year earlier. The employment rate was 75.5%, little changed compared with April to June 2018 but higher than for a year


Construction Output - September 2018 Construction output continued to recover following a relatively weak start to the year, increasing by 2.1% in Quarter 3 (July to Sept) 2018; this follows a fall of 1.6% in Quarter 1 (Jan to Mar) 2018 and an increase of 0.8% in Quarter 2 (Apr to June) 2018. Construction output increased 1.7% between August


by and


September 2018, this was driven by an increase in all new work which increased by 2.8%; this was partly offset by a fall of 0.3% in repair and maintenance.


The level of the all work series for September 2018 reached £13,995 million – a record high since the monthly records began in January 2010.


Commodity Prices - October 2018


Commodity prices mostly rose in October, with energy commodities rising


1.3% and non-energy commodities rising 1.2%. Oil prices fell about 2.5% on


Wednesday 28th after U.S. crude inventories rose for the 10th straight week to the highest in a year, adding to worries about a worldwide supply glut.


Foreign exchange analysis - Reuters November 27, 2018 Sterling slumped against the dollar and the euro on Tuesday 27th as doubts grew about whether British Prime Minister Theresa May can get a Brexit agreement through a divided parliament.


The US Dollar gained on Tuesday after Federal Reserve Vice Chair Richard Clarida backed further interest rate hikes but noted the importance of monitoring economic data as the US central bank approached a neutral stance.


1 GBP = 1.128 EUR 1 GBP = 1.282 USD


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