UK housing activity rises at quickest pace since September 2022
Newsflash: Growth in Britain’s housebuilding sector has hit its highest rate since the mini-budget almost two years ago.
Data provider S&P Global has reported that UK residential construction work “gained momentum” in August, with growth accelerating to its fastest since September 2022.
This increase in housebuilding was due to “improving market conditions” and lower borrowing costs, S&P Global says.
However, civil engineering growth slowed last month, which pulled the overall construction PMI down to 53.6 in August, down from July’s 26-month high of 55.3.
Tim Moore, economics director at S&P Global Market Intelligence, says:
“The UK construction sector appears to have turned a corner after a difficult start to 2024, with renewed vigour in the house building segment the most notable development in August. Residential work expanded at the fastest pace for almost two years as lower borrowing costs and a gradual recovery in market conditions helped to boost activity.
Commercial building was the best-performing part of the construction sector as the improving UK economic backdrop resulted in stronger order books, but the postelection bounce in demand faded somewhat in August.
Borrowing costs jumped after the September 2022 mini-budget, driving up mortgage rates and making it harder for buyers to get a home loan. Mortgage rates have been dropping this summer, as the City anticipates more interest rate cuts from the Bank of England.
The Labour government has pledged to “get Britain building again” by bringing back compulsory housebuilding targets, and to build 370,000 homes a year during the course of the current parliament.
Key events
Closing post
Time for a quick recap…
The UK’s housing sector has grown at the fastest rate since 2022, when the mini-budget knocked the industry almost two years ago, as the construction sector ‘turned a corner’ after a difficult start to the year.
But UK car sales fell in August, for the first time in just over two years, with the industry warning that the target for electric car sales this year will be missed.
In the US, a flurry of jobs data has painted a mixed picture, ahead of tomorrow’s official employment report, the Non-Farm Payroll.
Company payrolls rose by less than expected in August; they increased by 99,000, the smallest gain since 2021.
Job cuts also rose in August, with US employers announcing the greatest number of layoffs in five months.
But in better news, the number of Americans filing new claims for unemployment support fell last week, remaining at historically low levels.
Back in the UK, Royal Mail could be allowed to scrap second-class letter deliveries on Saturdays, as part of a shake-up of the company’s universal service obligation.
In the retail world, Currys has reported a jump in sales of electrical goods, thanks to the Euro 2024 mens football tournament and interest in AI.
But Primark has suffered a drop in UK sales this summer, as bad weather kept people off the high street and dampened demand for summer clothing.
The competition watchdog has launched an investigation into the Oasis ticket sales fiasco.
Petrol and diesel pump prices in the UK have fallen to their lowest levels in nearly three years.
John Lewis is reviving its “never knowingly undersold” price promise.
And in Germany, three executives from the defunct German payments firm have been ordered to pay €140m in damages today over loans to an Asian business partner that were never repaid.
Economic activity in the US services sector expanded for the second consecutive month in August, a new survey from the Institute of Supply Management shows.
The ISM’s Services PMI for August has risen to 51.5%, up from 51.4% in July.
This is the sixth month this year that the Services PMI has come in over 50 points, showing an expansion.
Services companies reported that business activity, new orders and employment all rose last month.
Steve Miller, chair of the Institute for Supply Management services business survey committee, says:
Slow-to-moderate growth was cited across many industries, while ongoing high costs and interest-rate pressures were often mentioned as negatively impacting business performance and driving softness in sales and traffic.
Although the Inventories Index increased by 3.1 percentage points into expansion territory in August, many respondents indicated their companies are still actively managing down their inventories.”
Back in the UK, there’s been a small shareholder rebellion at electricals retailer Currys, over executive pay.
Almost 12% of votes at its annual general meeting were cast against approving the Directors’ Annual Remuneration Report.
Wall Street has opened cautiously, as investors digest today’s flurry of US employment data.
The S&P 500 share index has risen by 2 points, or 0.05%, to 5,522 points at the open.
The narrower Dow Jones industrial average has dropped by 0.25%, following the slowdown in hiring and rise in layoffs in August.
Tech stocks, which do well in a low interest-rate environment, are rallying, pushing up the Nasdaq Composite index by 0.5%.
CMA launches investigation into Ticketmaster over Oasis concert sales
Britain’s competition watchdog has launched an investigation into Ticketmaster over the sale of tickets for Oasis concerts next year.
The Competition and Markets Authority will look into the ‘dynamic pricing’ which meant Oasis fans spent hours queuing, and were then presented with much higher ticket prices than advertised.
The CMA will look into whether the sale of Oasis tickets by Ticketmaster may have breached consumer protection law.
It will examine whether:
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Ticketmaster has engaged in unfair commercial practices which are prohibited under the Consumer Protection from Unfair Trading Regulations 2008
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People were given clear and timely information to explain that the tickets could be subject to so-called ‘dynamic pricing’ with prices changing depending on demand, and how this would operate, including the price they would pay for any tickets purchased
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People were put under pressure to buy tickets within a short period of time – at a higher price than they understood they would have to pay, potentially impacting their purchasing decisions.
US jobless claims fall
We are being spoiled today, with three surveys of the US jobs market.
And the third – the weekly tally of unemployment claims – is better than expected.
There were 227,000 new ‘initial claims’ for jobless support last week, a drop of 5,000 on the previous seven days, and below the 230,000 which economists expected.
Initial jobless claims decline to 227K while continuing claims ease to 1.838 million from a revised 1.86 million.
We continue to make the case that the increase in the unemployment rate over the past year is not due to layoffs but rather from individuals entering the labor… pic.twitter.com/KojVmi3vcf
— Joseph Brusuelas (@joebrusuelas) September 5, 2024
That may calm some concerns over the US economy.
US private payroll growth weaker than expected in August
Newsflash: In a further sign that the US jobs market is cooling, American firms added much fewer new jobs than expected last month.
The monthly survey of private sector hiring from payrolls operator ADP has found that private employers added 99,000 jobs in August.
That’s the smallest monthly rise since 2021, CNBC reports.
Economists had expected a rise of aroud 145,000.
This is the fifth month running that ADP has reported a slowdown in job creation among private employers.
And added to the rise in layoffs reported by Challenger earlier today, it paints a worrying picture about the US jobs market.
Nela Richardson, chief economist at ADP, says:
The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth. The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown.
Large companies, with at least 500 staff, added 42,000 workers last month, reports ADP.
Medium-sized, with between 50 and 499 staff, added a total of 68,000.
Firms with between 1 and 19 employees added 3,000 staff, but those with 2o to 49 employees laid off 12,000.
John Lewis to bring back ‘never knowingly undersold’ promise
Sarah Butler
John Lewis is reviving its “never knowingly undersold” price promise, which it ditched just two and a half years ago, as part of a marketing blitz as it heads into the all-important Christmas selling season.
The retailer said it would use AI tools to match prices both in-store and online for 25 competitors including Marks & Spencer, Boots, Currys, House of Fraser and, on technology only – Amazon – from Monday.
Under the new scheme, customers will be able to get their money back if they can show they have found an item cheaper at one of the 25 brands within seven days.
Peter Ruis, head of the department store group, said John Lewis was making a multimillion-pound investment in the relaunch of the slogan – which it used for nearly a century before it was dropped in February 2022 – including in the technology, price changes and marketing.
More here.
In another sign that the US jobs market is softening, year-to-date hiring has weakened too.
According to Challenger tracking, announced hiring plans have fallen to the lowest year-to-date total since Challenger began tracking company hiring plans in 2005.
The Challenger job layoffs report also shows that 37,403 job cuts were attributed to “Cost-Cutting” last month, while 16,439 were due to “Market/Economic Conditions.”
For the first time since April, employers specified Artificial Intelligence (AI) as a reason for job cuts.
Last month, 5,943 cuts were due to AI, all of which occurred in the Technology space. So far this year, 7,126 cuts are due to AI.
Here’s some snap reaction to the rise in US layoffs announced in August:
⚠️ Challenger report shows biggest job cuts in tech since Q1 ’23 (last big layoffs episode). Cuts in leisure/entertainment also up 85% YTD vs. last year. Lowest YTD hiring since 2005. Labor market looking fragile (at best) $USD pic.twitter.com/Tppc6FuRZj
— Viraj Patel (@VPatelFX) September 5, 2024
We just received another data point suggesting that the labor market is deteriorating faster than I expected.
The Challenger Job Cuts were almost three times higher than one month ago.
I recommend that my followers review their portfolio allocation and be confident that their… pic.twitter.com/22RH6XRDvL
— Andrea Lisi, CFA (@Andrea_Texas_82) September 5, 2024
US tech companies announced 39,563 job cuts in August, today’s Challenger report shows, out of 75,891 in total.
Andrew Challenger says the rollout of artificial intelligence systems is one factor driving layoffs:
The Tech sector is moving from a growth and innovation focus into one of profitability and efficiency. AI and automation adoption is also driving job cuts at Tech companies across roles and functions. This talent, however, is still in high demand.
Many of these professionals will land elsewhere, in and outside of the Tech industry. That said, we’re entering a period of slower hiring, so it may take longer than it has at any point in the last decade,”
Job cuts announced by US companies surge in August
Newsflash: There was a surge in layoffs at US companies in August, a new survey shows.
Firms announced 75,891 layoffs last month, roughly triple the number in July, outplacement firm Challenger, Gray and Christmas has reported.
More than half the layoffs were led by the technology sector, where companies have been cutting their workforce as the pandemic boom in demand for IT services faded.
Challenger vice president Andrew Challenger says:
“August’s surge in job cuts reflects growing economic uncertainty and shifting market dynamics. Companies are facing a variety of pressures, from rising operational costs to concerns about a potential economic slowdown, leading them to make tough decisions about workforce management.”
This jump in layoffs may add to concerns that the US labor market is cooling.
Greenpeace block access to Unilever HQ over single-use plastics row
Greenpeace UK have blocked access to Unilever’s headquarters in central London on Thursday morning claiming the consumer goods company is “trashing the planet and harming communities” through single-use plastics.
Members of the environmental campaign group have locked themselves onto barricades made from giant Dove products, one of Unilever’s biggest brands, with each product’s logo changed to a dead Dove.
Greenpeace is calling on Unilever to remove single-use plastic from its operations and phase it out fully within a decade, starting with plastic sachets, which they say are “near impossible to collect and recycle”.
Will McCallum, co-executive director at Greenpeace UK, said:
“Unilever’s plastic pollution is trashing the planet and harming communities.
“They hide behind the clean, respectable face of brands like Dove but we’re here today peeling back this facade to show the ugly truth behind it.”
He added:
“They must stop selling plastic sachets now, commit to phasing out single-use plastic within a decade and advocate for this same level of ambition at the final round of UN Global Plastics Treaty negotiations in November.”
Three former Wirecard executives ordered to pay €140m damages
Wirecard ex-CEO Markus Braun and two other executives at the defunct German payments firm have been ordered to pay €140m in damages today, Reuters reports, over loans to an Asian business partner that were never repaid.
A Munich court judge upheld claims by insolvency administrator Michael Jaffe that Braun and others had violated their duties in deciding to provide the loans to a company in Singapore.
The verdict, which is not final, is the latest chapter in one of Germany’s most egregious corporate scandals and is separate to the main trial against Braun and other executives. over Wirecard’s demise.
The company collapsed in June 2020 with a €1.9bn hole in its balance sheet, turning the spotlight on politicians who backed it and regulators accused of moving. too slowly to investigate allegations against it.
Braun, deputy finance chief Stephan von Erffa and Wirecard’s Asia representative Oliver Bellenhaus are currently on trial in Munich accused of fraud and falsifying financial statements.
Braun denies all wrongdoing.
In August, German prosecutors charged another two former Wirecard executives with several counts of embezzlement.
Jaffe and investors are trying to sue Wirecard managers and auditors for damages in various civil lawsuits.
Unions at Volkswagen could propose a four-day week, to avoid factory closures and job cuts at the German carmaker.
Christiane Benner, chair of the IG Metall union, has said it is “conceivable” that it could propose a four-day week, saying:
“We will leave no idea unexplored.”
But Benner cautioned that it is impossible to lay out detailed proposals without more information on what solutions VW is proposing, saying:
“We need forward-thinking ideas on where potential can be found. VW has survived difficult situations before.”
Yesterday VW told staff that it is considering shutting two German factories, in what would be the carmaker’s first closures ever in its home country.