Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

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December 12, 2023

MGNS | Economics – Fall in wage growth further improves rates outlook

Company news

Morgan Sindall Group (MGNS, 2,095p, £992m mkt cap)

Construction, regeneration and fit-out group. Directorship changes. Steve Crummett, Finance Director, has informed the Board of his intention to retire on 31 December 2024. Following a search process, Kelly Gangotra, currently CFO, Healthcare Sector at Halma and previously Chief Financial Officer of Skanska UK, has been selected to succeed as Finance Director. She will be appointed as Finance Director and a member of the Board on a date to be agreed, expected to be around the third quarter of 2024, when Mr Crummett will step down from both roles, allowing a period of transition.

Economic data

Employment data. Y/Y growth in average weekly earnings excluding bonuses dropped to 7.3% in the three months to October, from 7.8% to September, in the latest employment data from the ONS. This is widely viewed as removing any last vestige of risk that the Bank of England will raise base rates from the current 5.25% on Thursday. The softening in wage growth reflects a 45,000 fall in vacancies to 949,000. The unemployment rate, however, was unchanged at 4.2%.

Viewpoint: A pretty benign picture for the housing market as we head to the new year. Real wage growth of 1.4%, up from 1.3%, is probably low enough not to unnerve rate setters, but positive for housing affordability. Meanwhile, unemployment – an important factor in housing’s all important feel-good-factor, is unchanged after nudging up from ultra-low levels in recent months. What could possibly go wrong, in terms of a gradual recovery building momentum in 2024? Politicians, most likely …

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