price increases.. where do they end

[Buzz]

28 minutes ago, recoveringbuilder said:

My son in law who’s a qs says there’s a big shortage of brickies here.

Is that in preparation for rebuilding the wall just in case  St Nicola gets her way ?

[recoveringbuilder]

5 minutes ago, Buzz said:

Is that in preparation for rebuilding the wall just in case  St Nicola gets her way ?

It will be the will of the Scottish people if it happens but I can’t understand why it bothers the English so much?

[SteamyTea]

48 minutes ago, recoveringbuilder said:

Heard from a lady up here today that she is only able to order limited amounts of building materials and that prices are rising weekly. My son in law who’s a qs says there’s a big shortage of brickies here.

Shouldn't a labour shortage cause a materials price decrease?

Edited May 14, 2021 by SteamyTea

[Buzz]

1 minute ago, recoveringbuilder said:

It will be the will of the Scottish people if it happens

I totally agree , as it should be, no country should be forced to to accept the rules of a parliament when the majority wish to have self rule over how they are governed .

[joe90]

I think it will be a shame to break up the United Kingdom, but if that’s what they really want then it will save us subsidising them.

[recoveringbuilder]

2 minutes ago, joe90 said:

I think it will be a shame to break up the United Kingdom, but if that’s what they really want then it will save us subsidising them.

So why are Boris and co so against it then surely if they’re subsidising us it would be a relief to get shot

[joe90]

9 minutes ago, recoveringbuilder said:

So why are Boris and co so against it

In my opinion it’s because the majority of us consider the United Kingdom to be our country and don’t want it split up.

[dpmiller]

Boris certainly seems to be cutting NI adrift bit by bit, so I can't see him having any care for Scotland or Wales either.

[epsilonGreedy]

1 hour ago, SteamyTea said:

Shouldn't a labour shortage cause a materials price decrease?

 

 

Indeed, I suspect market manipulation by rumour. A simultaneous shortage of a commodity and consumers of a commodity is a bit suss.

[joe90]

43 minutes ago, dpmiller said:

Boris certainly seems to be cutting NI adrift bit by bit,

What I don’t understand about Brexit and NI, We didn’t want a border and wanted to continue trading as we did before but it’s made out that it’s our responsibility to provide one or find an alternative, if the EU wants to not trade as we did before why don’t they come up with one or find an alternative.

[Adsibob]

2 hours ago, SteamyTea said:

Shouldn't a labour shortage cause a materials price decrease?

excess demand over supply 

[Temp]

2 hours ago, joe90 said:

What I don’t understand about Brexit and NI, We didn’t want a border and wanted to continue trading as we did before but it’s made out that it’s our responsibility to provide one or find an alternative, if the EU wants to not trade as we did before why don’t they come up with one or find an alternative.

 

The Customs Union _was_ the EU solution to allowing trade without borders. It had been working pretty well i think. You will have to ask Brexiteers why we choose to leave the Customs Union as well as the EU.

[joe90]

4 hours ago, Temp said:

The Customs Union _was_ the EU solution to allowing trade without borders.

But only within the EU, they would still control our ability to do trade deals with the rest of the world, especially the Eastern countries that are expanding faster than the west. It’s all about control (IMO).

[PeterW]

Getting back to the point there are global shortages of certain things now, including labour. Some trades are still not fully back to work and I’ve seen mention of people on furlough til October. 
 

Construction Price Index shows a fair amount of fluctuation but rebar, steel and timber are the biggest 3 moving year on year 

 

Full report is here

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/982529/21-cs5_-_Construction_Building_Materials_-_Commentary_April_2021.pdf

[SteamyTea]

35 minutes ago, PeterW said:

Full report is here

The FAO has a number of reports and tools.

I would never have though that the UK was the 3^rd biggest importer of sawn wood and the 4^th biggest importer of wood panels.

But we are the 2^nd biggest exporter of recovered paper.

http://www.fao.org/forestry/statistics/80938@180724/en/

[SimonD]

1 hour ago, PeterW said:

Getting back to the point there are global shortages of certain things now, including labour. Some trades are still not fully back to work and I’ve seen mention of people on furlough til October. 
 

Construction Price Index shows a fair amount of fluctuation but rebar, steel and timber are the biggest 3 moving year on year

 

For me it's interesting that those 2 are also traded as commodities where their futures values have rocketed recently as have all raw materials. Unfortunately this can decouple their value from mere supply/demand because the high values attract investors looking to make a quick buck, which of course inflates their value even more, producing an unpleasant inflationary cycle.

 

As you say, it's interesting that construction isn't back to full steam yet. According to this article https://www.building.co.uk/data/market-forecast-high-hopes/5111690.article construction output is still below pre-pandemic levels. Another point the article mentions is that infrastructure projects are maintaining demand.

 

Something else I came across was that supply capacity hasn't been keeping pace with demand for a good 10 years or so, thus we already had a foundation of a constant upward trend in materials prices.

 

I suspect that as recovery continues, we're actually going to see further problems with supply and thus price inflation, and some opinion suggests it's going to continue for at least a year or so.

 

[SimonD]

51 minutes ago, SteamyTea said:

The FAO has a number of reports and tools.

I would never have though that the UK was the 3^rd biggest importer of sawn wood and the 4^th biggest importer of wood panels.

But we are the 2^nd biggest exporter of recovered paper.

http://www.fao.org/forestry/statistics/80938@180724/en/

 

I think all our timber supplies were decimated during WW2 and never replanted enough so we've had to rely on imports for timber. I read an article fairly recently that UK timber plantation owners were preferring to limit local supply because the capital value of the plantations was comfortably increasing year on year, making a good investment. I wonder whether, with the current lumbar prices, we might see a wave of local British timber hitting the market....

 

[joe90]

42 minutes ago, SimonD said:

futures values have rocketed recently

Futures are something I do not understand, people making profit without either buying or selling anything???? Middle men causing  price increases ?‍♂️

[SteamyTea]

4 minutes ago, joe90 said:

Futures are something I do not understand, people making profit without either buying or selling anything???? Middle men causing  price increases ?‍♂️

They help stabilise prices as well.

It may not be at the price you like, but it is a known price.

Arbitrage does a similar thing, by buying at a cheap price somewhere, then selling at a place that can support higher prices, both sides benefit.

 

Now speculators are a different kettle if fish, they buy at distressed price, or buy up the complete supply, then will only sell at the price they have decided on.

They try to control, and distort, the market place.

[Adsibob]

4 hours ago, joe90 said:

But only within the EU, they would still control our ability to do trade deals with the rest of the world, especially the Eastern countries that are expanding faster than the west. It’s all about control (IMO).

Yes, but one can't take the trade benefits of EU membership without giving up that control. Otherwise, it would undermine the whole point of a customs union. If we could have our cake and eat it, then there would be nothing to stop the UK from undercutting the EU in negotiations with third parties and then importing stuff to the UK from outside the EU more cheaply than one can import it from within the EU and then exporting it to the EU.

So for example, let's say Australian wine carries a 2 euro tariff when imported to the EU. The UK leaves the EU and makes a  deal such that it can import Australian wine with no tarrifs. Ozzie wine is now cheaper in the UK than in France because we decided not to charge tariffs. Some clever merchant spots this and starts importing Ozzie wine to the UK and then exporting it France. This effectively robs the EU the ability to impose that 2 euro tarriff on Ozzie wine. So it completely undermines the customs union.

We could have left the EU but joined EFTA like Iceland Liechtenstein, Norway and Iceland.

[Temp]

5 hours ago, joe90 said:

But only within the EU, they would still control our ability to do trade deals with the rest of the world, especially the Eastern countries that are expanding faster than the west. It’s all about control (IMO).

 

The whole point of the Customs Union is to ensure a level playing field and yes that woukd include us all agreeing the same trade deals with the rest of the world. We can't alow the Germans a special deal with say China that would undercut British manufacturers any more than they could allow us to do the same to their manufacturers. We either all agree to follow the same rules or we need border controls to enforce our own local rules.  We've chosen the latter.

 

It may seem like the EU is causing a problem at the moment but remember the UK delayed imposing our own border controls until June because we went ready in January.

 

 

Edited May 15, 2021 by Temp

[SimonD]

On 15/05/2021 at 10:47, joe90 said:

Futures are something I do not understand, people making profit without either buying or selling anything???? Middle men causing  price increases ?‍♂️

 

It is a weird thing and as @SteamyTea says, when it's about investor speculation, it's just one facet of rentier capitalism - if you've got the money you buy up finite or in demand natural resources and then restrict supply for your own income. However, there is a contract where they do technically buy the commodity, it's just agreed at a specific date in the future. The contract is then settled either with the actual product or cash, but the contact can be bought and sold anytime until the contract is due as the value of the contract varies, so it's a popular way for traders to make money.

 

During the pandemic oil futures went into negative territory because those who had futures couldn't sell the contract, or the oil, so would be hit by huge storage costs and were offering to pay to get rid of the contract.

[SimonD]

On 15/05/2021 at 12:51, Adsibob said:

Yes, but one can't take the trade benefits of EU membership without giving up that control. Otherwise, it would undermine the whole point of a customs union. If we could have our cake and eat it, then there would be nothing to stop the UK from undercutting the EU in negotiations with third parties and then importing stuff to the UK from outside the EU more cheaply than one can import it from within the EU and then exporting it to the EU.

So for example, let's say Australian wine carries a 2 euro tariff when imported to the EU. The UK leaves the EU and makes a  deal such that it can import Australian wine with no tarrifs. Ozzie wine is now cheaper in the UK than in France because we decided not to charge tariffs. Some clever merchant spots this and starts importing Ozzie wine to the UK and then exporting it France. This effectively robs the EU the ability to impose that 2 euro tarriff on Ozzie wine. So it completely undermines the customs union.

We could have left the EU but joined EFTA like Iceland Liechtenstein, Norway and Iceland.

 

The irony here is that this is exactly how the international tax system works and why we've got massive multi-national companies avoiding local taxes. It's called transfer pricing where companies allocate earnings and profits to low tax regimes, utilising various tax treaties between individual countries. Rather makes a mockery of these dearly held EU mechanisms even if the EU is trying to clamp down on this practise. I'd hazard a guess that the Brexiteers thought they could implement a similar system with Brexit and trade agreements, but who knows...

[Adsibob]

3 hours ago, SimonD said:

I'd hazard a guess that the Brexiteers thought they could implement a similar system with Brexit and trade agreements, but who knows...

That's exactly what they thought! If you look at the majority of tax havens in the world: Guernsey, Jersey, Isle of Man, Antigua, The Bahamas, the Cook Islands and Niue, Saint Vincent and the Grenadines, St Christopher and Nevis; The BVI... these are all protected territories of the UK. That is, they are independent but the benefit from our Supreme Court also being their Supreme Court (i.e. the Privy Council) and they also get military protection from the UK. The UK could threaten to withhold those two benefits (i.e. the rule of law and security) if these countries don't stop their tax havens allowing the Amazons of this world to fleece the UK tax payer. But they don't. This is not coincidence. Most UK prime ministers have a tonne of money hidden away in these tax havens and are in the pockets of big corporates. 

[SteamyTea]

How would people feel, if over a decade, house prices rose at the general inflation rate?

Or even better, if they had the same deflation rate that white goods and technology has had over the last 30 years.