Macro Economics

The Consumer Price Index (CPI) measure of inflation continued to rise in the quarter reaching 2.9% in May, before dropping to 2.6% in June.

The Retail Price Index (RPI) alternative measure edged lower in June to 3.5%, from 3.7% the month before. Interest rates remain at historical lows of 0.25%. The growth in weekly earnings remains below the headline rates of inflation, squeezing consumer spending with no real demand growth as price rises outstrip the rate of pay. This is forecast to continue as the weaker pound compounds import costs. Weekly earnings, whilst up on 12 months, slowed from 2.1% to 1.8% in the three months to May. GDP output growth was 0.2% in Q1 with most commentators expecting 0.3% in Q2, leading to annualised growth of 2.1% which is still an increase in output. However, historically when consumer spending slows, the economy slows. 

Our Methodology

Every quarter we undertake an extensive survey of our workload and live market tenders received to establish any movement in tender pricing. Our research department correlates this with our in-house indices which, when overlaid on Macro Economics and Output projections, allows us to establish trends and forecasts. This is further corroborated by our external Contractor Market Survey, where we gain insight of specific issues affecting specialist trades pricing and procurement through selective questioning of contractors. Gardiner & Theobald is fortunate to work across a wide range of projects in various sectors of the UK Construction Industry providing us with a unique range of raw data upon which our research team can base its forecasts.