CPA Weekly Notes – 07 / 10 / 2019
New CPA Blog: Construction Product Regulations Post-Brexit
In a guest blog for the CPA, Chandru Dissaneyeke, Director of Building Safety Reform, Building Safety Programme at the Ministry of Housing, Communities and Local Government explains what you need to do to ensure you and your company are ready for Brexit. Read more.
BEIS Brexit Updates
The Department for Business, Energy and Industrial Strategy has issued the following new and updated information concerning aspects of Brexit:
- Guidance on how to move goods through RoRo locations in a no deal Brexit: EU to UK and UK to EU
- Guidance on using customs procedures in a no-deal Brexit.
HMRC Helpline & Guidance
HMRC has launched the EU Exit Import and Export Trader Helpline for traders and hauliers importing from/exporting to the EU after Thursday 31 October 2019. The helpline no. is 0300 3301 331. Lines are open from 8am to 6pm Monday to Friday. stats?
- The ONS has released its quarterly national accounts data for 2019 Q2, which showed that UK GDP declined 0.2% from Q1, unrevised from the initial estimate. This marked the first quarterly contraction since 2012 Q4, driven by the unwinding of Brexit-related stockpiling that occurred in Q1. Although the services sector was the only positive contributor to GDP growth in the second quarter, it recorded the weakest quarterly growth (0.1%) in nearly three years. Meanwhile, industrial production and construction output declined 1.8% and 1.2% respectively. For the production industry, this marked the largest quarterly decline since 2012 Q4, driven by a sharp fall in manufacturing output as car manufacturers brought forward their annual maintenance shutdowns to April. In annual terms, GDP in Q2 was 1.3% higher.
- According to the ONS’s revised estimate, business investment decreased 0.4% quarter-on-quarter in 2019 Q2, following an increase of 0.8% in Q1, driven by declines in investment in information and communication technology (ICT) and other machinery and equipment. In annual terms, business investment decreased 1.4% in Q2, the fifth consecutive quarter of annual decline, reflecting the impact of ongoing Brexit-related uncertainty on business sentiment.
- The Markit/CIPS PMI for construction was 43.3 in September, down from 45.0 in August and below the no-change mark of 50, indicating that construction activity contracted for a fifth consecutive month. The decline was also the second-sharpest since April 2009 and broad-based across all three main categories of construction work. Commercial building remained the weakest-performing category, with activity falling at the sharpest rate since April 2009, whilst civil engineering activity fell at the sharpest pace in nearly a decade. Residential building also declined for the fourth consecutive month in September. The latest survey also showed that new orders fell at the second-fastest rate since March 2009 due to Brexit uncertainty and weak demand, whilst employment declined at the fastest pace in nearly a decade.
- The Markit/CIPS PMI index for manufacturing was 48.3 in September, up from August’s six-and-a-half year low of 47.4. The index, however, remained below the no-change of mark 50, indicating that activity in the manufacturing sector contracted for the fifth consecutive month. Output, new orders (both domestic and exports) and employment all declined in September. The latter fell at the sharpest pace since February 2013, reflecting declines across the consumer, intermediate and investment goods industries and at SMEs and large-sized producers. The latest survey also revealed that manufacturers resumed stockpiling in September, with stocks of purchases and input buying volumes rising for the first time in recent months. This contrasts with Make UK/BDO’s Manufacturing Outlook survey for Q3, which found no evidence that firms were rebuilding their stocks of inputs ahead of 31 October.
- The Markit/CIPS PMI for services was 49.5 in September, down from 50.6 in August and below the no-change mark of 50, indicating that service sector output declined for the first time since March 2019, with both new and outstanding business declining. Furthermore, employment in the services sector fell for the first time in five months and at the fastest rate since August 2010. Against this backdrop, business optimism towards the year-ahead weakened for the fourth consecutive month and reached its lowest level since July 2016.
- The price of Brent Crude oil averaged $62.3 per barrel in September, according to the World Bank. This was a 5.2% increase from August but 21.0% lower than a year ago. This marked the tenth consecutive month of annual decline and the sharpest fall since June 2016 due to ongoing trade tensions and weaker global demand.
- The Sterling/Dollar exchange rate averaged 1.24 in September, 1.6% higher than in August but depreciating 5.4% year-on-year, according to the Bank of England. Against the Euro, the Sterling averaged 1.12, a 2.7% increase compared to August and 0.3% higher than a year earlier.
- According to Nationwide, in September, UK house price fell 0.2% month-on-month but rose 0.2% on a yearly basis. This marked the tenth consecutive month in which annual house price growth had been below 1%. The average UK house price in September was £215,352. Nationwide also published its quarterly regional statistics, which showed that UK house prices increased 0.3% in annual terms in Q3. Consistent with recent quarters, regional disparities continued in Q3, with London and the South East continuing to record annual house price falls.
- According to the Bank of England, in August, the number of mortgages approved for house purchase decreased 0.9% year-on-year and 2.2% month-on-month. The value of these loans was 4.6% higher than a year ago but decreased 0.8% month-on-month. The number of loans for remortgaging decreased 6.0% year-on-year but increased 1.9% compared to July. The value of these loans decreased 7.1% on a yearly basis but rose 1.3% on a monthly basis.
- According to the Bank of England, housing equity repayment totalled £6.9 billion in 2019 Q2. The amount paid back decreased 1.9% on a quarterly basis but was 24.0% higher compared to a year earlier.
- In England, private housing starts totalled 30,390 in 2019 Q2, the lowest since 2016 Q1 according to MHCLG. This was a 2.2% decrease from Q1 and 8.4% lower than in 2018 Q2. Private completions increased 1.6% quarter-on-quarter and 8.3% year-on-year to reach 36,150 in Q2, the highest number since 2007 Q4. Public housing starts totalled 6,840 in Q2, a decrease of 1.3% compared to Q1 and 4.3% lower than in 2018 Q2. On a quarterly basis, public completions increased 17.7% to 9,040, and rose 24.3% on an annual basis.