ECONOMIC SNAPSHOT
GOOD TIME TO RE-ENGAGE
The latest facts and figures from the British Home Enhancement Trades Association (BHETA) and what they mean for suppliers to the home improvement industry.
B HETA home
improvement sector director Paul Grinsell says: “As we enter the New Year, it’s no surprise that online
retailing remains one of the growth areas in home improvement, this market having for the most part been slower to adopt internet sales than many others. ut it’s also interesting to read predictions suggesting that from next year, bricks and mortar may well start to show a comeback – alongside online - especially as improving rather than moving remains a trend post the Brexit vote. “As the run up to Easter approaches,
it’s time to get ready to capitalise on the well-documented consumer urge to spring clean, declutter and make over the home and garden environment which kicks in as soon as New Year is out of the way. If this year is anything like last, then planning submissions will see an upsurge and the continued shortage of new housing across Great Britain generally will undoubtedly help fuel home improvement activity as home owners look to ‘improve not move’. “Ideally then, whether you are a supplier
or a retailer, there could not be a better time to combine online convenience, peer review and price comparison with the renewed consumer interest in shopping instore. Home improvement shoppers are beginning to hanker after more engagement – even, more enjoyment - in the purchasing experience. So, it’s worth giving some thought to the fact that a good destination home improvement experience can offer an attractive mix of personal service and informed advice. Sales can certainly result from time taken to steer a customer through a world of choices with genuine interest and attention. Cynically, this service may be just a ‘sell-up’ or a ‘cross-sell’, but it may be that in the end the repeat purchases that will result over time are in fact the most valuable. And, then there are services – from key cutting to sign making to tool sharpening to paint mixing and matching that only really work in a bricks and mortar environment.
“Post-Christmas may be a traditionally flat period for home and garden, but there are trends working in the market’s favour and a key sales period – including National Home Improvement Week – is just around the corner.”
10 DIY WEEK 19 JANUARY 2018
Consumer Price Index – November 2017
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.8% in November 2017, unchanged from October 2017.
The Consumer Prices Index (CPI) 12-month rate was 3.1% in November 2017, up from 3% in October 2017; it was last higher in March 2012. The largest upward contribution to change in both the CPIH and CPI rates came from air fares which fell between October and November but by less than a year ago. Rising prices for a range of recreational and cultural goods and services, most notably computer games, also had an upward effect.
Falling prices in the miscellaneous goods and services category (covering products such as travel goods and financial services) provided the largest offsetting downward contribution.
Retail Sales – November 2017 The underlying pattern in the retail industry in November 2017, as suggested by the three-month on three-month measure remains one of growth, with the quantity bought increasing by 0.8%. When compared with October 2017, the quantity bought in November 2017 increased by 1.1%, with household goods stores showing strong growth at 2.9%. Retailers’ feedback suggests that “Black
Friday” events contributed to the monthly increase in household goods stores, with electrical household appliances making the largest contribution to the growth. The year-on-year growth rate shows the
quantity bought increased by 1.6%. Total average store prices increased by 3.1% in November 2017 when compared with the same period last year, with price increases across all store types, in particular food stores had the largest price increase of 3.6% since September 2013.
Mortgage Approvals – October 2017 According to the Bank of England, net lending secured on dwellings was broadly unchanged at £3.4 billion in October 2017. Underlying this were increases in gross lending and repayments due to increases in remortgaging activity. Total mortgage approvals increased slightly in October 2017. Within this,
remortgaging approvals increased to 51,593, the highest since October 2008. House purchase mortgage approvals fell slightly to 64,575 in October 2017.
House price index – October 2017 Average house prices in the UK have increased by 4.5% in the year to October 2017 (down from 4.8% in September 2017). The annual growth rate has slowed since mid-2016 but has remained broadly around 5% during 2017.
The average UK house price was £224,000 in October 2017. This is £10,000 higher than in October 2016 and £1,000 lower than last month.
The main contribution to the increase in UK house prices came from England, where house prices increased by 4.7% over the year to October 2017, with the average price in England now £241,000. Wales saw house prices increase by 4.5% over the last 12 months to stand at £153,000. In Scotland, the average price increased by 2.8% over the year to stand at £144,000. The average price in Northern Ireland currently stands at £132,000, an increase of 6.0% over the year to Quarter 3 (July to Sept) 2017.
Labour Market – August to October 2017
Estimates from the Labour Force Survey show that, between May to July 2017 and August to October 2017, the number of people in work fell, the number of unemployed people also fell, and the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) increased. There were 32.08 million people in work, 56,000 fewer than for May to July 2017 but 325,000 more than for a year earlier.
The employment rate (the proportion of people aged from 16 to 64 who were in work) was 75.1%, lower than for May to July 2017 (75.3%) but higher than for a year earlier (74.4%). There were 1.43 million unemployed people (people not in work but seeking and available to work), 26,000 fewer than for May to July 2017 and 182,000 fewer than for a year earlier. The unemployment rate (the
proportion of those in work plus those unemployed, that were unemployed) was 4.3%, down from 4.8% for a year
earlier and the joint lowest since 1975.
Construction Output – November 2017 This is the first monthly construction output release to include Value Added Tax (VAT) data from 87,000 businesses on top of the 8,000 in the Monthly Business Survey.
Construction output contracted for the sixth consecutive period in the three- month on three-month time series, falling by 2% in November 2017; this represents the largest fall since August 2012. There were three-month on three-month
decreases in both all new work, and repair and maintenance, which fell by 2.1% and 1.7% respectively, although private housing new work did grow by 1.2%. Despite the overall three-month on
three-month fall, construction output increased by 0.4% month-on-month in November 2017.
The month-on-month increase in
construction output occurred as a result of a 0.5% rise in repair and maintenance, and a 0.4% increase in all new work.
Commodity prices – December 2017 According to the World Bank, energy commodity prices gained 2% in December 2017 —the sixth consecutive monthly gain—led by a 6% increase in coal prices. Metals and mineral prices gained less than 1%. A large gain in iron ore (up 12%) was offset by declines in zinc and nickel. Precious metals prices declined 2%, led by a 1% decline in gold.
Foreign Exchange Analysis – Reuters December 21 2017
Sterling traded flat on Thursday, December 21 in a quiet market after falling initially following a survey that showed consumer sentiment had fallen to a four-year low and news that Britain’s deputy prime minister had been forced to resign.
The pound had edged lower following
the resignation but data showing British public finances had strengthened in November helped the pound recover. 1 GBP = 1.13 EUR 1 GBP = 1.33 USD
The GFK consumer confidence index showed British consumer sentiment at its lowest level since December 2013 as inflation-squeezed households took a gloomier view of their finances.
www.diyweek.net
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