Average wealth has increased by 59% in the past decade while earnings have grown just 19%
Even among the wealthiest the value of assets has grown by 64% compared with 20% for salaries
The growth in average wealth from assets including property and investments has been three times higher than the growth in average earnings over the past decade, new analysis* from Handelsbanken Wealth & Asset Management shows.
Figures show people are being out-earned by their homes and other investments, with average wealth rising 59% over the past decade compared with 19% growth in salaries over the same period, according to Handelsbanken Wealth Management & Asset Management’s analysis of the latest Government data on Britons’ wealth and assets and earnings.
Average wealth for Britons is estimated at £575,948 after a decade of growth from £361,831, with house price rises as well as increases in pensions, investments and physical wealth including possessions all appreciating in value since 2010. By contrast, average earnings have only increased to £31,840.
For the wealthiest 25% of the population, the growth in assets has been even more impressive – they now own wealth estimated at £733,800 compared with £447,900 a decade ago. They have seen their wealth increase 34% faster than the British average, while their salaries have increased 22% faster.
Of course, the growth in wealth has not been shared equally throughout the country – the wealthiest people in London have seen their wealth grow by 77% over the period to an average £902,400, compared with £495,200 in 2010.
The top 25% wealthiest in the North East have only seen growth of 30% during the same period, taking them to an average £459,500, which equates to an increase of £105,300. Growth among the top quartile of wealthiest people in the South East was 77% during the same period, compared with 69% in the East of England and 66% in the South and Wales. The North West saw growth of 45%.
PK Patel, Head of Wealth Management at Handelsbanken Wealth & Asset Management, said: “Earnings growth has on average been constrained over the past 10 years, with most people relying on their houses, investments, and possessions to boost their wealth.
“It is fascinating to see the gulf between the increase in asset values and the increase in average earnings over the past decade, and is instructive for advisers and their clients on how to plan their finances and assess their wealth.
“No matter how your total wealth is made up, it’s important to have a clear plan on how you want to use it for your own future and for the benefit of other family members.”
Table one: wealth and salary growth for the richest quartile by UK region, 2008-10 vs 2018-20
Region
Top quartile average wealth
Top quartile average salary
2008-10
2018-20
Growth
2010
2020
Growth
North East
£354,200
£459,500
30%
27736.5
£33,108
19%
North West
£387,400
£561,400
45%
29272
£35,256
20%
Yorkshire & the Humber
£376,300
£556,300
48%
28591.5
£33,890
19%
East Midlands
£415,500
£617,900
49%
29442
£35,204
20%
West Midlands
£399,200
£621,500
56%
28654.5
£35,003
22%
East of England
£511,500
£864,700
69%
33006.5
£38,938
18%
London
£495,200
£902,400
82%
39157.5
£47,423
21%
South East
£597,100
£1,058,000
77%
34775.5
£40,834
17%
South West
£485,300
£805,500
66%
28887
£34,434
19%
Wales
£383,900
£635,700
66%
27845.5
£33,453
20%
Scotland
£364,000
£584,800
61%
30072.5
£36,889
23%
Great Britain
£447,900
£733,800
64%
31401
£37,625
20%
Table two: average wealth and salary growth by UK region, 2008-10 vs 2018-20
Innovators to share in £150K prize fund and other business growth support measures
A host of University of Edinburgh students and alumni who have founded their own startup companies are celebrating after taking honours at this year’s Scottish EDGE Awards.
Xiaoyan Ma, founder of Danu Robotics, an innovative business focused on developing sustainable technological solutions for the benefit of the environment, was named among this year’s main award winners. The company secures £75K in grant funding to accompany its award.
Three other company founders, which have also been supported by Edinburgh Innovations (EI), the University’s commercialisation service, were named as Young EDGE winners. They include Alex Hodson of Podspectrix; Niall McGrath of Robocean; and Elena Höge of Yaldi Games.
Meanwhile Ioannis Stasinopoulos of Prozymi Biolabs, a further EI-supported startup, was named as a Wildcard EDGE award winner. Between them, the four companies will share a further £45K in grant funding along with their awards.
The annual Scottish EDGE Awards, aimed at identifying and supporting Scotland’s up-and-coming, innovative, high-growth entrepreneurial talent, recognises and supports entrepreneurs and startup businesses.
Funded by the Hunter Foundation, the Royal Bank of Scotland, the Scottish Government, Scottish Enterprise and private donors, the competition is delivered twice annually and has to date supported 395 early-stage Scottish businesses with over £15m in award funding.
The winners from this year’s Scottish EDGE Awards will share in more than £150K ingrants and benefit from other forms of support and mentoring to help them maximise their growth aspirations.
John Lonsdale, Head of Enterprise Services from Edinburgh Innovations said:“We congratulate all the University of Edinburgh students and alumni in their success at this year’s Scottish EDGE Awards.
“We are delighted to have supported these emerging companies, all of which are focused on developing innovative solutions to some of the key challenges facing society.
“As an organisation committed to helping University of Edinburgh startups reach their full potential, Edinburgh Innovations is proud of its role in supporting entrepreneurs who are driving economic growth in Scotland and beyond.”
World’s oldest remaining building society sees major growth in savings and mortgages
Scottish Building Society, the world’s oldest remaining building society, has posted record results for the financial year ended 31 January 2022.
Established in 1848, the mutual has seen its balance sheet grow by nearly 40% in the last 2 years, leading to a pre-tax profit of £2.4m and mortgage assets of £454m.
The Society, which only offers savings and mortgage accounts, ascribed the growth to customers seeking both value and purpose when joining SBS.
The Society’s Chief Executive, Paul Denton said: “We are as committed to our wider purpose today, as we were back in 1848. As a mutual society, we reward our members with fair interest rates whilst responsibly using those funds to provide flexible mortgages, enabling Scottish people to buy homes and get on the property ladder.
“The environment has changed over the years, but that simple strategy has helped the Society survive and thrive towards its 175th anniversary next year.”
As the society is a mutually owned organisation, it has been able to offer its members savings accounts above market average interest rates, helping people get the most out of their money.
Mr. Denton continued: “Despite the historic low base rate, we have continued to pay savings rates above the market average, whilst our income has benefitted by growing our mortgage balances more than 36% in the last two years.
“We are now helping more members buy their homes than ever before, which is something we are incredibly proud of in today’s fierce mortgage market.
“As a mutual, unlike the high street banks, we do not have shareholders, so all profits are reinvested into the business, in areas such as in new digital technologies, improving our member experience and increasing our capital base to support future growth.”
Mr. Denton credits the staff at SBS for their “immense work” during the pandemic as one of the reasons why the society has performed so strongly.
He explained: “It has been without doubt two enormously difficult years from an economic and operational perspective, but our staff have delivered outstanding results despite these major challenges.
“Unlike retail banks who are moving out of towns and cities across the country, we are working harder than ever to provide for our members- be that through online or in-person banking.
“When many of our competitors sought to save money by cutting services, we were looking for ways to help our members, by offering compelling interest rates for savers and have now helped a record number of people own their own home.”
Scotland’s monthly rate of 1.2% is highest since August
Fife sees £4 million sale
Shortage of housing stock continues to support prices
Average Scottish house price now at £215,388, monthly rise of 1.2%, 7.6% up annually
Scott Jack, Regional Development Director at Walker Fraser Steele, comments:
“Our report this month shows that the average house price in Scotland has increased by some £15,200 – or 7.6% – over the last twelve months, to the end of January this year. This is an £800 increase over the revised £14,400 growth in prices we witnessed to the end of December last year. Of equal significance is the fact that this heralds a reverse to the slide in the annual rate which had started over the previous three months. While the growth rate here in Scotland trails that of Wales by 1.4%, it is still higher than the average 7.3% in England and Wales overall. The Scottish market is continuing to perform well.
“What we are seeing in this return to growth is that people are still living, moving, buying and selling in the aftermath of the pandemic and the “lifestyle” changes it brought about. Working from Home has encouraged many homebuyers to move to larger premises which can accommodate a different way of living and working. Many have been in search of more outdoor space too – the so-called “Race for Space”. The issue here is that while there is a high demand for such homes, the supply is limited, so there continues to be strong competition for the properties that do come onto the market, with robust price increases as a result.”
Commentary: John Tindale, Acadata Senior Housing Analyst
The January housing market In January 2022, the annual rate of house price growth increased to 7.6%, from 7.3% in December 2021. This represents an increase of £15,200 over the average price of a property at the end of January 2021. The increase in the growth rate brings about a halt to the downturn in rates observed over the previous three months.
Over the last 12 months, there are six Local Authority Areas which between them have accounted for just under 50% of the £15,200 increase in the average price, on a weight-adjusted basis. (A weight adjusted basis takes into account both the change in the authority’s own average price as well as the number of sales involved.) The six areas are – in order of prominence – Fife, the City of Edinburgh, Glasgow City, South Lanarkshire, Highland and West Lothian.
On a monthly basis, prices in January 2022 rose by 1.2%, or £2,572, with Scotland’s average house price now standing at £215,388. This is the highest increase in a month since August 2021, and sets a further record average price for Scotland – providing an additional indication of the general upward pressure on prices.
Figure 1. The annual rate of house price growth in Scotland over the period January 2020 to January 2022 with trendline
So what is causing the ongoing upward movement in prices? In general terms, we are still living with the effects of the pandemic and the “lifestyle” changes this has brought about – in particular the “Work from Home” edict has encouraged many to move to larger premises with outdoor facilities – the so-called “Race for Space”. There is high demand for such homes, but supply is limited, so there continues to be strong competition for the properties that do come onto the market, with resultant price increases.
Last month we showed that the highest rise in property prices over the last ten years had taken place during the pandemic, with the Lothians being the top three authorities in terms of price growth. We suggested this was due to many purchasers looking for a home with plenty of space outside of Edinburgh city centre, but still remaining within reasonable commuting distance of the capital.
Transactions analysis
Monthly transaction counts
Figure 2 below shows the monthly transaction count for purchases during the period January 2015 to January 2022, based on RoS (Registers of Scotland) figures for the Date of Entry. (January 2022 figures are based on RoS Application dates.)
The fall in the number of transactions at the onset of the pandemic in March/April 2020 is clearly visible – the March 2020 property sales that actually took place would largely have been agreed prior to the commencement of the first lockdown in Scotland on 24 March 2020. However, what is also clear is the recovery in sales during the summer of 2020, followed by an acceleration from August 2020 to a peak of 13,055 transactions in October 2020 – the highest number in a single month since November 2007.
It can be seen too that sales per month from September 2020 to March 2021 were at higher levels than the previous five years, as the market played ‘catch-up’ with the transactions lost during the spring and early summer months. It also benefitted from the LBTT tax reductions available from 15 July 2020 to 31 March 2021 (inclusive).
Noteworthy as well is the spike in sales in March 2021 – as the tax reduction expiry date approached – as is the fall in sales in April 2021, indicating the extent to which buyers had managed to bring forward their purchases into March 2021 to take advantage of the LBTT tax savings.
Sales volumes from May to December 2021 look roughly on a par with, or slightly ahead of, previous years, perhaps suggesting that the market has now returned to its pre-pandemic transaction levels.
Comparing total sales in 2020 with those of 2019, there was a 13% fall in the overall size of the market. However, looking at the total number of transactions in 2021 and comparing them to 2019 (2020 figures are distorted by the lockdown in the early stages of the pandemic), sales are up by 10%. 2021 had the highest number of transactions in a year since 2007
Figure 2. The number of sales per month recorded by RoS based on entry date (RoS applications date for January 2022), for the period 2015 – 2022. (Source: Registers of Scotland.)
Scotland transactions of £750k or higher
Table 2. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – January 2022
Table 2 shows the number of transactions per month in Scotland which are equal to or greater than £750k. The threshold of £750k has been selected as it is the breakpoint at which the highest rate of LBTT becomes payable.
Table 2 shows that there were 54 sales in excess of £750k during January 2022, and we anticipate that this number will increase as further sales for the month are processed by the Registers of Scotland.
In 2021, total sales in excess of, or equal to, £750k amounted to 1,097 in number – and we expect this total to reach 1,100 as RoS continues to process late registrations for the year. This is the largest number of high-value sales that we have recorded in a year.
The reasons for this dramatic increase in top-end sales in 2021 are, as previously discussed, partly to do with the change in preference for larger properties. During the pandemic the nation was instructed to “work from home”, which established an appetite for larger properties with areas which could be used as offices and ideally with outdoor facilities – the “race for space”. Home movers and office workers were thus encouraged to look for premises which better suited their updated needs.
The process of moving home was additionally assisted by the existence of the record low interest rates, which made the purchase of a top-end property more affordable, as well as the tax savings associated with the LBTT holiday, available up to the end of March 2021, which encouraged the whole market to be more adventurous in its outlook.
However, the peak of the “pandemic market” appears to have occurred in September 2021 (see Figures 1 and 2). As a result, it can be seen that in each month subsequent to that date, the number of homes purchased with a value of £750k or above, has been less than that recorded in the same month of the previous year.
Local Authority Analysis
Table 3. Average House Prices in Scotland, by local authority area, comparing January 2021, December 2021 and January 2022
Table 3 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for January 2021, as well as for December 2021 and January 2022, calculated on a seasonal- and mix-adjusted basis. The ranking in Table 3 is based on the local authority area’s average house price for January 2022. Local Authority areas shaded in blue experienced record average house prices in January.
Annual change
The average house price in Scotland has increased by some £15,200 – or 7.6% – over the last twelve months, to the end of January. This is an £800 increase over the revised £14,400 growth in prices seen to the end of December 2021, but importantly stops the slide in the annual rate which had been evident over the previous three months. Scotland’s growth rate now trails the Wales rate of 9.0% by 1.4%, but in percentage terms is still higher than the average 7.3% in England and Wales overall.
In January 2022, 30 of the 32 local authority areas in Scotland saw their average prices rise over the previous twelve months. The two areas with price falls compared to one year earlier were East Renfrewshire and Aberdeen City. In East Renfrewshire, prices of detached homes have fallen from an average £440k in January 2021 to £415k in January 2022. Part of this reduction in the average price of detached homes in East Renfrewshire was due to a fall in the number of homes that sold for more than £750k – there were five such properties purchased in January 2021, but none in January 2022. As we reported last month, this is symptomatic of a general reduction in the purchase of high-value homes in Scotland during the final quarter of 2021, which is now extending into the first month of 2022.
In Aberdeen City the average price of flats has fallen by £5k over the last twelve months. However, in Aberdeen, there is a strong correlation between house prices and the price of crude oil, so we anticipate that property values will begin to increase following the recent dramatic rise in oil prices.
The area with the highest annual increase in average house prices in January 2022 was the Orkney Islands, where values have risen by 19.6% over the year. On the mainland, the highest rise in prices occurred in Fife, where average prices rose by 14.8%. Sales in the month included a magnificent apartment in the Hamilton Grand, overlooking the final hole of the Old St Andrews Golf Course, which changed hands for a reported £4 million. If you are an avid golf fan there is probably no better place in the world to live.
Monthly change
In January 2022, Scotland’s average house price in the month rose by some £2,500, or 1.2%, which is the highest increase of the last five months. The average price of a home in Scotland now stands at £215,388, which sets a new record level for the nation for the eighth time in the last twelve months.
In January, 21 Local Authority areas in Scotland experienced rising prices in the month, compared to 19 in December. The largest increase in average prices in January, of 5.6%, was in Na h-Eileanan Siar. However, as often stated on these pages, Scotland’s Island groups tend to see volatile price movements, due to the low number of sales that take place each month (in this case 18).
On the mainland, West Lothian saw the largest increase in prices in the month, of 4.4%. All property types saw an increase in prices in West Lothian, with the largest contribution to the increase coming from detached homes. The increase in the average price of detached homes was helped this month by the purchase of a resplendent four-bedroom property for £835k, located in Westfield, Bathgate, some fifteen miles to the west of Edinburgh. As mentioned earlier, the Lothians tick all the boxes in terms of ‘pandemic living’, with plenty of space, large properties and a relatively easy commute, if required, into Edinburgh.
Peak Prices
Each month, in Table 3 above, we highlight in light blue the local authority areas which have reached a new record in their average house prices. In January there are 15 such authorities, one more than in December. We can also add that Scotland itself has set a new record average price in January 2022 – the first of the year.
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending January 2022. As reported above, all but two of the 32 local authority areas in Scotland are reporting an increase in their house values over the last year. The two areas with negative growth are East Renfrewshire and Aberdeen City, where prices over the year have fallen by -2.5% and -1.4% respectively. The highest increase over the twelve months to January 2022 was in the Orkney Islands at 19.6%, followed by the Shetland Islands at 16.6% – on the mainland it was Fife that was top with price growth of 14.8%.
Comparisons with Scotland
Figure 3. Scotland house prices, compared with England and Wales, Wales, North East and North West for the period January 2005-January 2022
Figure 4. A comparison of the annual change in house prices in Scotland, England and Wales, Wales, North East and North West for the period January 2005–January 2022
Scotland’s Seven Cities
Figure 5. Average house prices for Scotland’s seven cities from November 2020–January 202
Figure 6. Average house prices for Scotland’s seven cities January 2022
Acute rental demand over Q3 2021 has pushed UK rental growth to its highest level since 2008
Annual rent growth has increased by 7.2% in Glasgow and 3.6% in Edinburgh
Demand continues to outstrip supply, which is running at 43% below the five-year average – exerting an upward pressure on rents
Average UK rents are now tracking at +4.6% on the year [and 6% excluding London], after climbing 3% over the last quarter – with rental demand doubling in central Leeds, Manchester and Edinburgh and London in Q3 v. Q1
Rental growth is close to, or at, a 10-year high across most UK regions – except for in London and Scotland
After 15 months of consecutive falls, London’s rents have swung back into positive territory, rising by 4.7% between June and September, as offices reopened and city life resumed
The structural undersupply of rental properties across the country and the strength of the employment market will support rental growth into 2022
UK rental growth [excluding London] is set to ease slightly to 4.5% by the end of 2022
UK rental market growth has reached a 13 year high as renters rush back to city centres, reports Zoopla, the UK’s leading property portal, in its quarterly Rental Market Report.
Record price growth defines new era for the UK rental market
Acute tenant demand over the third quarter of 2021 has propelled UK rental growth to its highest level for over a decade [13 years].
The market is being shaped by an ongoing supply and demand imbalance, with demand continuing to outstrip supply, which is running at 43% below the five year average and exerting an upward pressure on rents.
The imbalance has been compounded by both long-term structural issues such as landlord divestment following the 3% stamp duty levy introduced in 2016, and more the immediate post-lockdown demand, which collectively have eroded available supply.
Average UK rents are now tracking at 4.6% year on year, after climbing 3% over the last quarter. Excluding London, where the market has lagged, average UK rental growth has reached a 14-year high of +6%.
Rental growth is also explained in part by tenant demand moving up the price bands [see figure 1]. This reflects the ongoing search for space, which has not only characterised the sales market, but the rental market, too.
UK monthly rents now account for 37% of an average income for a single tenant occupant; however, even with strong rental growth, the measure of affordability remains in line with the five year average [see figure 2]*.
The regions registering the highest levels of rental growth are among those that are the most affordable when compared to the UK average, and as such, there has been more headroom for rents to increase.
Rental growth is close to, or at, a 10-year high across most UK regions – except for in London and Scotland. Rents are up most in the South West (9%) year on year, followed by Wales (7.7%) and the East Midlands (6.9%).
In many of the UK’s largest cities, annual rental growth is running well ahead of the five-year average rate of growth. Bristol leads with 8.4% growth in the year to September, followed by Nottingham at 8.3%, and Glasgow at 7.2%.
Rental demand in the central zones of Manchester, Edinburgh and Leeds has at least doubled over Q3 compared to Q1, and in Birmingham demand has increased by 60% – buoyed by the return of office workers and students, and the lure of city life.
Figure 2
London rents rebound into positive growth – but remain lower than pre-pandemic levels
After 15 months of consecutive falls, London’s rents swung back into positive territory, up +4.7%, in Q3. This amounts to annual growth of +1.6% compared to falls of almost 10% at the start of the year.
As with other major UK cities, market activity rose significantly in Q3, with tenancies agreed in London running 50% above the five-year average, underlining the bounceback in the market as offices reopened and city life resumed.
Despite this upward trajectory, given the falls over the last 18 months, average London rents are still 5% lower than they were at the start of the pandemic.
Rents forecast to rise by a further 4.5% by the end of 2022
Looking ahead to the new year, the structural undersupply of rental properties across the country is expected to support rental growth into 2022.
In addition, the supply shortage coupled with the strength of the employment market which, despite the pandemic, is set to remain robust, will in turn support demand and sustain rental growth.
While the level of rental demand might ease in the near term in line with seasonal trends, demand levels will remain higher than usual, especially in city centres, where there is an element of pent-up demand being released.
On the supply side, rental stock will remain tight, amid lower levels of investment into the sector by landlords, and this will underpin rental pricing. There is more leeway for stronger rental growth in areas of the country where rents are relatively more affordable, suggesting that rents could rise above earnings outside of the south of England, supporting rental growth across the UK excluding London at 6% in 2021 and 4% in 2022.
Meanwhile, London rental growth is expected to pick up to 3.5%, with rents ultimately exceeding pre-pandemic levels.
Gráinne Gilmore, Head of Research, Zoopla, comments: “The swing back of demand into city centres, including London, has underpinned another rise in rents in Q3, especially as the supply of rental property remains tight.
“Households looking for the flexibility of rental accomodation, especially students and city workers, are back in the market after consecutive lockdowns affected demand levels in major cities.
“Meanwhile, just as in the sales market, there is still a cohort of renters looking for properties offering more space, or a more rural or coastal location.”
*The methodology Zoopla has used to calculate affordability has changed from the last quarter; Zoopla is now using ASHE data, and previously used the Labour Force Survey.
Pace of sector recovery reduces in 3 months to end of July 2021, but long-term indicators suggest quick return to upward momentum
Value of project starts in three months to end of July 2021 dips by 14% compared to buoyant start of the year
Planning consents down 20% in three months to end of July 2021 against previous three months
However, contract awards show resilience, three months to end of July 82% up on same period in 2020 and 43% above same period in 2019
Non-residential RMI Work increases by 2.3% in three months to end of July, up over 50% against previous three months in 2021
East of England region on the brink of return to pre-COVID levels of output
Glenigan, the construction industry’s leading insight and intelligence experts, has released the August edition of its Construction Review.
This monthly report provides a detailed and comprehensive analysis of construction data, giving built environment professionals unique insight into results from the three months to the end of July 2021.
Short-term slowdown
Following a growth spurt in the first half of 2021, momentum has started to show signs of slowing down. This recent decline has been led by a sharp fall in private residential and civil engineering work.
Overall, the value of projects starting on-site averaged £5,497 million per month in the three months to July. Despite being 27% higher than the same period in 2020, it remains 14% lower than the preceding three months in 2021.
Fig 1. August Construction Review Summary
This sudden fall can be attributed, in part, to a 19% decline in the value of underlying project (<£100m in value) starts. Although these were up 36% on 2020, the figures are still 24% lower than pre-pandemic levels.
Whilst the value of major projects remained unchanged (£1,740 million per month) against the preceding three months to July, they were still 2% down on 2019 levels.
Best laid plans
Planning consents have also seen a slip during this slower period, down 20% against the previous three months. Major planning approvals are more stable, but also witnessed an 8% decrease.
However, on a positive note, planning consent levels remain significantly higher on both 2020 and 2019.
Back on track
Looking further ahead, the strengthening pattern of main contract awards points to renewed growth in project-starts during the second half of the year.
Although the value of main contracts awarded slipped 1% against the previous six months, it remained 43% above the same period in 2019 (82% up on 2020). Putting this into perspective, major contract awards were three-and-a-half times higher than a year ago and 98% ahead of pre-COVID levels.
Recovery progressing
Despite the m-o-m decline, second quarter output was up 3.3% on the preceding three months.
Further, some areas of activity saw modest growth on Q.1, with RMI work increasing by 2.3% (53.5% ahead of 2020 figures). Much of this is accounted for by non-housing repair and maintenance work, perhaps reflecting the easing of COVID-19 restrictions and calls from Government and business to return to city centre workspaces.
There was also a slight uptick in new-build output (3.9%) in Q.2 against Q.1, with private housing experiencing a marked upward spike of 10.6%.
In line with Glenigan’s previous reviews and indexes, infrastructure has been the strongest performing sector for new work, rising 15.9% against the preceding quarter.
Industrial and commercial sector activity also rose by 3.8% and 0.8% respectively against the first quarter.
The biggest losers were the new public residential and non-residential sectors, which saw a slight dip in output of 1.5% and 1.4% respectively.
Strong performers
Regionally, Scotland achieved strongest growth project-starts against the previous year (124%) during the previous three months to end of July 2021. However, these figures were still below 2019 levels.
Yorkshire and The Humber also achieved three digit growth on 2020, but slipped by 14% against the previous three months.
Recovery is strengthening in the East of England, which is the closest UK region to returning to 2019 levels of output against the previous three months to July. Climbing 58%, the area is now only 9% off a pre-pandemic footing.
These positive figures are further tempered with continued output decline registered in Wales, the North East and South East. This highlights the sector still as a way to go to full nationwide recovery, even if good progress is being made.
Commenting on the findings, Glenigan’s Economic Director, Allan Wilen (above) says, “There’s no doubt the slowdown seen over the last three months has been the result of a perfect storm of external events, beyond the industry’s control.
“Supply chain issues continue to bite and look likely to remain a challenge for the foreseeable future. However, the sector is showing its strength across the board, and this modest slowing of pace is certainly not as serious as many might have predicted.
“With a number of major projects in the pipeline, a potential national green retrofitting programme and core infrastructure remediation work upcoming, there are reasons to stay positive as we look to the second half of 2021 and beyond.
“Our recent Forecast for 2021-2023 indicates 2022 will see a return to pre-COVID levels of project-starts, and whilst we’re not there quite yet, we’re seeing lost ground being made up at a quicker rate than anyone would have predicted this time last year.”
To request a copy of Glenigan’s full August Construction Review, with sector-by-sector analysis, click here.
Scotland’s onshore GDP grew by 0.9% in June, according to statistics announced today by the Chief Statistician. Output remains 2.1% below the pre-pandemic level in February 2020.
Services sector output grew by 1.2% in June, with increases in seven of the 14 subsectors. The largest contribution to growth was from accommodation and food services for the third month in a row as activity continued to pick up after the easing of restrictions.
Output in the production sector increased by 0.5% overall, with growth in the electricity and gas supply subsector offset by falls in manufacturing and water and waste management. Output in the construction sector is estimated to have fallen by 1.4%, broadly in line with the UK as a whole over the course of the latest quarter.
Using the experimental monthly statistics for Quarter 2 as a whole (April to June), GDP is provisionally estimated to have grown by 4.9%, reflecting a recovery in output after the fall of 1.8% during the lockdown restrictions in Quarter 1.
Scottish Secretary Alister Jack responds to June figures
Scottish Secretary Alister Jack said: “While today’s figures show some resilience, we still face challenges. A strong, sustainable recovery remains our priority.
“The UK Government put unprecedented measures in place from the very beginning of the pandemic to protect lives and livelihoods. That’s included supporting the jobs of nearly a million people in Scotland through furlough and with unprecedented financial help for the self-employed.
“More than 90,000 businesses have benefited from business loans and VAT cuts have kept firms in the hardest hit sectors afloat.
“We’ve provided the Scottish Government with more than £14.5 billion in additional funding, £1.5 billion has been invested in growth deals across Scotland and our new Levelling Up and Community Renewal Funds will benefit communities right across the UK.
“In driving our economy into recovery, our Plan for Jobs will help more people get back into work and the success of the UK Government-funded vaccine programme is paving the way for us to build back better and stronger.”
The Monthly GDP Estimate for June 2021 is available at:
