ECONOMIC SNAPSHOT ECONOMIC SN ECONOMIC SN
LOOKING BEHIND THE HEADLINES
B TA HETA
The latest facts and figures from the British Home Enhancement Trades Association (BHETA) and what they mean f or suppliers to the home improvement industry. 2017, the quantity bought in
impr ovement and garden sector director Paul Grinsell says:
sales figures from the ONS still show evidence of growth, albeit slow. Nevertheless, the word is ‘growth’. When you look around and see big names like Maplin’s in trouble – not to mention T R Us – you find yourself viewing growth statistics with unease. I’m not saying they are wrong – far fr om it – but do they tell the whole story? Add to Maplin, a thir d pr ofit warning from Carpetright, the retail brand used by GfK to benchmark performance in UK plc, a mixed year in the T Perkins Group attributed to the decline in consumer confidence and B&Q cutting jobs, and you can quickly end up feeling cynical. So, it was particularly good news that BHETA’s most recent forum included viewpoints from both the Bank of England and the CBI sharing their interpr etations of the situation for retailers and suppliers in the home improvement, garden, small electricals, and housewares sectors.
tion Toys To he Tra Tr vis The light they shone
on what feels increasingly like a dissonance between overall growth and the situation in retail specifically was interesting.
The narrative was this. The global economy is growing at the fastest pace in seven years and the UK’s net trade is being supported by the low pound and this buoyant global backdrop, so surveys show strong output growth in the quarter to February. The consumer however, continues to be squeezedr,, continues to be by higher inflation, which in turn, cr eates challenging conditions for r etailers. Retail sales consequently grew at a subdued pace in the year to February - slightly below expectations and under the long- r un average. In fact, this marked the third consecutive month of slower growth in retail volumes and highlights the impact on the sector from weaker household
consumer r,, 10 DIY WEEK 9 MARCH 2018 spending. As a r As a result, while the
outlook remains modest growth in the UK, this is undermined by weak consumer spending, as inflation remains
elevated and earnings only pick up a little.
In short, if the sector is feeling pressure, at least it is not imagining it, which is not only something of a relief, but also a firmer base on which to build. Going forward it’s all about creative thinking and how to woo what sales there are a) easier, b) more
by making them a) easier r,
engaging and inspirational and c) more efficient and practical. W ar e entering the key sales period in home and garden impr ovement - including National Home Improvement Week - so it’s time to acknowledge the realities of the market and then work hard on the opportunities we have.
and practical. We We We
Consumer Price Index – January 2018
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.7% in January 2018, unchanged from December 2017. The lar gest downwar d contribution to change in the rate came fr om prices for motor fuels, which rose by less than they did a year ago. The main upward effect came from prices for a range of recreational and cultural goods and services.
The Consumer Prices Index
(CPI) 12-month rate was 3.0% in January 2018, unchanged from December 2017.
Retail Sales -–January 2018 In January 2018, the underlying
n January 2018, the underlying pattern in retail sales, as suggested by the three-month on three- month measur e,
is one of slow
gr owth with the quantity bought increasing by 0.1%; the lowest growth since April 2017.
The monthly growth rate for the quantity bought increased by 0.1% with declines across all main sectors except non-food stores. When compared with January
January 2018 incr eased by 1.6%; a slowdown to year-on-year gr owth when compared with an incr ease of 2.4% in January 2017.
Mortgage approvals – December 2017
The number of mortgages approved for house purchase in the UK fell to 61,039 in December 2017 from a downwardly revised 64,712 in the previous month. The figure came in below market expectations of 66,000 and hit the lowest level since January 2015, a month after the Bank of England’s decision to raise inter est rates for the first time in more than a decade.
verage house prices in the UK have increased by 5.2% in the year to December. The annual growth rate has slowed since mid-2016 but has remained broadly around 5% during 2017.
House Price Index – December 2017 Av
The main contribution to the increase in UK house prices came from England, where house prices increased by 5.0% over the year to December 2017, with the average price in England now £244,000. Wales saw house prices increase by 5.4% over the last 12 months to stand at £154,000. In Scotland, the average price incr eased by 7.7% over the year to stand at £149,000. The average price in Northern Ireland currently stands at £130,000, an incr ease of 4.3% over the year to Quarter 4, 2017.
Wa ales Labour Market – October - December 2017
Estimates from the Labour Force Survey show that, between Jul - Sep 2017 and Oct - Dec 2017, the number of people in work and the number of unemployed people both increased, but the number of people aged from 16 to 64 not working and not seeking or available to work decreased.
There were 32.15 million people in work, 88,000 more than for Jul
- Sep 2017 and 321,000 more than for a year earlier.
The employment rate was 75.2%, higher than for a year earlier (74.6%). The unemployment rate was 4.4%, down from 4.8% for a year earlier.
Construction output – January 2018
Construction output continued its recent decline in the three-months to December 2017, contracting for the eighth consecutive period in the three-month on three-month series, falling by 0.7%.
This fall of 0.7% for Quarter four (Oct to Dec) 2017 is the third consecutive quarter of decline, r epr esenting the most sustained fall in quarterly construction output since Quarter three (July to Sept) 2012.
Despite falling in both the three-month on three-month and quarter-on-quarter time series, construction output grew in the month-on-month series, increasing by 1.6% in December 2017.
Commodity prices – January 2018
Commodity prices rose across- the-board in January 2018, led by ener gy commodity prices, which sur ged 9.2%. Non-energy prices rose 3.3%. Raw materials prices increased 2.8%, food prices 2.6%, and beverages 1.1%. Both base and precious metals prices rose more than 5%.
Foreign exchange analysis - Reuters - 26th February 2018 The dollar rose against most curr encies,
except the euro, in
choppy trading on Monday 26th February ahead of a slew of U.S. economic data and events this week, including Federal Reserve Chairman Jerome Powell’s testimony which could determine whether the greenback’s recovery from a three-year low can be sustained.
1 GBP = 1.13 EUR 1 GBP = 1.39 USD
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