Friday property news update
The global outlook, the return of British business confidence and hoteliers battle for survival
3 minutes to read
What next for the global economy?
Forecasting the economic impact of the pandemic can be carried out with greater certainty following significant progress in the development of vaccines, one of which will begin a UK roll-out next week.
Though the global economy will grow in 2021, it will remain smaller than its pre-pandemic size at the end of the year, according to average forecasts from four sources analysed by Flora Harley. The economy is forecast to surpass its pre-pandemic size in 2022, closing the year up 4%.
Economies with lighter touch restrictions have fared best during 2020. South Korea, Hong Kong and Sweden were just 3% smaller in the third quarter than they were at the end of 2019. Fresh lockdowns are likely to cause contractions during Q4 however, notably across the Euro area and the UK, which are forecast to contract just under 8% and 11% respectively for this year.
Business confidence returns to the UK
Despite the prevailing restrictions, business confidence in the UK is recovering, according to a new Bank of England survey of 3,000 business leaders.
Businesses expect sales in the second quarter of next year to be 2% below pre-pandemic levels, compared to an 8% shortfall forecast in October. If vaccines are widely available by then, employment is set to be 3% lower than it would have otherwise been. Last month it was forecast to fall 7%.
Meanwhile, “high-value” business travellers entering the UK will not have to self-isolate, starting 4am on Saturday. Executives from large companies — defined as more than 50 staff — will not be required to quarantine or take a Covid-19 test if they are involved in high-value deals that deliver a “significant” economic return to the UK.
The differing outlooks of economic superpowers
New US claims for unemployment benefits have dipped for the first time in three weeks, the government said yesterday. Nearly 714,000 people filed claims for state unemployment insurance last week, compared with 836,000 the week before.
However, with new infections continuing to rise, the short-term outlook remains uncertain. New employment data due to be published later today will likely show US employers likely made 469,000 hires last month after rising by 638,000 in October, according to a Reuters survey of economists. That would be the smallest gain since the jobs recovery started in May.
Meanwhile the recovery in China shows few signs of slowing. Exports and imports are expected to rise at a faster pace in November, underpinned by strong demand and coronavirus-related disruptions at factories elsewhere, according to a Reuters survey of economists.
How the UK hotel sector is adapting to survive
The demand shock of Covid-19 and the complexities involved with operating under extremely restrictive conditions have exerted tremendous financial pressures on hotel owners.
Philippa Goldstein has spoken to leading hotel brands, operators and owners to chart a path through the current crisis, and considers which factors are likely to fuel growth over the longer term.
Over the short term, domestic demand for staycation is expected to remain strong, with a renewed focus on lifestyle and experiential travel. Plus, a certain level of distress is inevitable, resulting in the disappearance of weaker brands, poorly managed, and under-invested hotels.
In other news...
If you missed this week's market outlook webinars, you can watch the recordings here for the UK and here for the global perspective.
Plus, maybe it was the sandwiches, because the Brexit negotiations went backwards after lunch, a 4-Day Workweek for 5 Days’ Pay, Q1 will be ‘the mother of all quarters’ for commercial dealmaking, the ‘everything rally’, frozen Covid vaccines can reach developing nations says DHL, ESG is a-changin’, Boris Johnson puts business tax cuts on the table, the Crown Estate aims for net zero emissions by 2030, Britain to set a more ambitious target to cut emissions, Singapore’s richest family clashes over Chinese property expansion, and finally, does a ski home make a good investment?