Boom time for consumer and contract markets
May 5, 2021
Economists are agreed - pent-up demand real and is going to rack up unprecedented consumer spending this Summer, and revive the contract sector too.
Barclays boss Jes Staley has predicted the biggest economic boom since World War Two thanks to the Covid vaccine rollout and pent-up demand from consumers.
Mr Staley said "the second half of 2021 will be quite something" as consumers' pent up spending power is released.
Mr Staley said "the second half of 2021 will be quite something" as consumers' pent up spending power is released.
The Virgin Money bank said its view of the UK economy had improved as the coronavirus vaccination programme continued to roll out.
Chief executive David Duffy told the BBC that since non-essential shops had reopened in April, credit card spending was up 25% - close to pre-pandemic levels.
"There is a desire to come back and spend, and that's happening now," he said.
Chief executive David Duffy told the BBC that since non-essential shops had reopened in April, credit card spending was up 25% - close to pre-pandemic levels.
"There is a desire to come back and spend, and that's happening now," he said.
Chancellor Rishi Sunak is a little more cautious but no by mch when he said earlier this week that the "signs are promising" for the economy, adding that cash-rich consumers would drive the recovery.
He told the Wall Street Journal: "As we look forward to reopening over the coming weeks and months, there are signs to be cautiously optimistic, and we can see that in the data, and I'm hopeful that would be sustained through the rest of the year."
He told the Wall Street Journal: "As we look forward to reopening over the coming weeks and months, there are signs to be cautiously optimistic, and we can see that in the data, and I'm hopeful that would be sustained through the rest of the year."
Contract market recovery
A large increase in activity within the hotel and leisure helped contract awards in the construction industry return to above historical average levels for the first time since September, according to a new report.
The latest edition of the Economic & Construction Market Review from industry analyst Barbour ABI found contract awards of £5.8bn increased by 22 per cent in March compared to February
Sector analysis revealed that residential contract awards remained stable in March at historical average levels, after picking up in February, but the hotel and leisure sector contract awards value reached £1bnn in March as planning approvals in December and January converted to contract awards.
Tom Hall, chief economist at Barbour ABI and AMA Research, said: "After a weak recovery over the second half of 2020 and the beginning of 2021, March saw a definite improvement across the planning environment. Importantly increases were seen in the commercially sensitive sectors of hotel and leisure in contract awards, and residential and commercial in planning approvals.
"However, this is only one month of improvement and the planning environment is notoriously volatile. The catch-up of “lost” contract awards since the start of the pandemic amounts to some £15bn of projects, or around 20-25% of the annual contract award value. We would therefore expect a significant amount of catch up over the next couple of months as the economy reopens to strengthen a currently weak construction pipeline.
"All things equal this is some much-needed positive news for the sector after an exceptionally challenging 12 months."
The latest edition of the Economic & Construction Market Review from industry analyst Barbour ABI found contract awards of £5.8bn increased by 22 per cent in March compared to February
Sector analysis revealed that residential contract awards remained stable in March at historical average levels, after picking up in February, but the hotel and leisure sector contract awards value reached £1bnn in March as planning approvals in December and January converted to contract awards.
Tom Hall, chief economist at Barbour ABI and AMA Research, said: "After a weak recovery over the second half of 2020 and the beginning of 2021, March saw a definite improvement across the planning environment. Importantly increases were seen in the commercially sensitive sectors of hotel and leisure in contract awards, and residential and commercial in planning approvals.
"However, this is only one month of improvement and the planning environment is notoriously volatile. The catch-up of “lost” contract awards since the start of the pandemic amounts to some £15bn of projects, or around 20-25% of the annual contract award value. We would therefore expect a significant amount of catch up over the next couple of months as the economy reopens to strengthen a currently weak construction pipeline.
"All things equal this is some much-needed positive news for the sector after an exceptionally challenging 12 months."
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