BHETA ECONOMIC SNAPSHOT BHETA ECONO BHETA ECONO OMIC SNAPSHOT MIXED MESSAGES TA B Wo HETA home
impr ovement sector director Paul Grinsell says: Of
s: Of Many BHETA ff s: Official
statistics still tell us we are in growth. TA members confirm
that sales are holding up although the market is tough.
The Black
Friday phenomenon, while it might not have produced the High Street r,, nevertheless
crowds of yesteryear, nev
saw momentum build during the day and Barclaycard, which processes nearly half of all debit and credit card transactions in the UK, estimated that the day’s consumer spending finished 8% up on 2016.
On the face of it this is good, but official figur es also show a couple of significant threats to discretionary consumer spending. One is inflation and the other is the first inter est rate rise in many years with the eventual impact this will have on non-discr etionary expenses like mortgage payments.
So wher e does this leave suppliers? Working harder than ever to secure the sales growth most certainly but also having to make plans for 2018 based on pressure to allow for increased wage demands.
certainly y,, Given
the issues for consumer spending, funding that spending is becoming a r eal question for the coming year. Over the last two years, salary increases in the private sector have generally not been great as all sectors try to maintain the delicate balance of the status quo in uncertain times. It seems unlikely that this will be sustainable for all that much longer. Pressures on employees mean pressures on employers and that in turn will eventually impact on prices at the ‘factory gate’ and so on in a circle of upward costs.
So, among all the official figures with their positive and not so positive messages are some very serious questions in terms of future planning which will affect suppliers, wholesalers, retailers, and consumers in equal measure.
Consumer Price Index – October 2017
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation
www.diyweek.net
rate was 2.8% in October 2017, unchanged from September 2017. The inflation rate for food and non-alcoholic beverages continued to incr ease to 4.1%; the highest since September 2013. Rising prices for food an d,
recreational goods provided the largest upward
on the year ar. Mortgage and consumerr. lending combined is up 4.0%.
Less than 30% of households have mortgages, and 60% of
t o a lesser extent , contributions
to change in the rate between September 2017 and October 2017. The upward contributions were offset by falling motor fuel and furniture prices, along with owner occupiers’ housing costs, which remained unchanged between September 2017 and October 2017, having risen a year ago.
Retail Sales
– October 2017 r etail
industry
The underlying pattern in the in October 2017,
as suggested by the thr ee-month on thr ee-month measure is one of growth, with the quantity bought incr easing by 0.9%. The quantity bought in October 2017 incr eased by 0.3% compared with September 2017; non-food stor es, in particular second-hand goods stores (charity shops, auction houses, antiques and fine art dealers) pr ovided the lar gest contribution to this growth.
The longer-term picture as shown by the year-on-year growth rate shows the quantity bought fell by 0.3% in comparison with a str ong October 2016; food stor es provided the largest contribution to this fall. Average stor e prices increased by 3.1% compared with October 2016, with the lar gest contribution fr om food stor es where average prices rose by 3.5%, the largest year -on- year price incr ease since September 2013. Online sales values incr eased year -on-year by 10.7%, accounting for appr oximately 16.9% of all r etail spending.
Av t
Mortgage Approvals – September 2017
According to the Bank of England, mortgage approvals for house purchase fell to a three month low to 66,232 at September
from an
upwar dly revised 67,232 in August. Mortgage lending, which lags behind approvals, rose by £3.848 billion in September and is 3.2% higher
these are
fixed-rate, compared with just 30% 15 years ago. For the average borrower with a variable rate mortgage, interest payments will rise by £180 a year if rates return to 0.5%, according to mortgage lender Nationwide.
verage house prices in the UK have increased by 5.4% in the year to September 2017 (up fr om 4.8% in August 2017). The annual growth rate has slowed since mid-2016 but has r emained br oadly ar ound 5% during 2017.
House Price Index – September 2017 Av
Average h
The average UK house price was £226,000 in September 2017. This is £1 1,000 higher than in September 2016 and £1,000 higher than last month.
The main contribution to the increase in UK house prices came from England, wher e house prices increased by 5.7% over the year to September 2017, with the average price in England now £244,000. Wales saw house prices increase by 5.3% over the last 12 months to stand at £153,000. In Scotland, the average price incr eased by 3.1% over the year to stand at £145,000. average price
Wa ales saw The in Norther n
Ir eland currently stands at £132,000, an increase of 6.0% over the year to Quarter 3 (July to Sept) 2017.
Labour Market
UK Labour Market: April-June 2017
Estimates fr om the Labour Force Survey show that, between April to June 2017 and July to September 2017, the number of people in work fell slightly
slightly y,, the number of
unemployed people also fell, and the number of people aged fr om 16 to 64 not working and not seeking or available to work incr eased.
There were 32.06 million people in work, 14,000 fewer than for April to June 2017 but 279,000 mor e than for a year earlier.
The employment rate was 75.0%, down slightly compar ed with April to June 2017 but up from 74.4% for a year earlier.
T
AFFECT 2018 PLANNING
The latest facts and figures from the British Home Enhancement TrTrrades Associa tion (BHETA) and what they mean f or suppliers to the home improvement industry .
There were 1.42 millio n
unemployed people, 59,000 fewer than for April to June 2017 and 182,000 fewer than for a year earlier . The unemployment rate was 4.3%, down fr om 4.8% for a year earlier and the joint lowest since 1975.
Construction Output – September 2017
Constr uction output contracted by 0.9% in the three-month on thr ee- month series in September 2017, but remains at r elatively high levels. This
fall of 0.9% for Quarter
three (July to September) follows a decline of 0.5% in Quarter two (April to June), repr esenting the first consecutive quarter-on-quarter decline in curr ent estimates of construction output since Quarter three 2012.
The 0.9% decline in output was due to decr eases in both r epair and maintenance, which fell 1.4% and all new work, which fell 0.7%.
Constr uction output fell 1.6% month-on-month in September 2017, stemming from falls of 2.1% in repair and maintenance and 1.3% in all new work.
Commodity Prices – October 2017
According to the World Bank, orld Bank, oil prices ar e forecast to average $56 a barr el in 2018 from $53 this year as a result of steadily growing demand, agr eed production cuts among oil exports and stabilising US shale oil production, while the surge in metals prices is expected to level of f next year.
Wo
Foreign Exchange Analysis: Reuters – November 20, 2017 The euro recovered from a two- month low against the yen touched in Asian trade on Monday 20th, with investors brushing of f the br oader political risks of a failur e of German chancellor Angela Merkel to form a thr ee-way coalition government. Sterling rose 0.5% to a 2-1/2 week high on Monday 20th, with weekend news on the pr ogr ess of Brexit negotiations interpreted as mildly positive for the British currency
y.. 1 GBP = 1.12 EUR 15 DECEMBER 2017 DIY WEEK 7
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