More promising economic outlook for the rest of 2021
In what is usually a quiet time for commercial property transactions, this summer has lived up to expectations with most transactions grinding to a halt as advisors and clients alike take their annual leave.
There are a number of commercial investment properties on the market at the moment which are either sale agreed or with closing dates, including Shane Retail Park in Belfast which we understand is now sale agreed and due to complete later in the summer.
It is therefore timely to reflect on wider economic considerations and look forward to the remainder of the year, rather than concentrate on the limited number of commercial property transactions that are progressing during the holiday period.
As you will be aware, employers are increasingly reporting difficulties in finding staff, particularly in the hospitality and food retail sectors. The problem has been exacerbated by the pandemic, which refers to those notified by the NHS Covid App that they have been in close contact with someone who has tested positive for Covid and have to self-isolate for 10 days.
Staff shortages and supply chain difficulties in the UK have even been picked up by CNN, who are now reporting shortages of fuel and food at some petrol stations and supermarkets as a direct result of the 'pingdemic'.
Confusion is also rife as to what to do if you get a ping if you are already double jabbed and have had a negative PCR T=test. With the rules changing on a daily basis clarity is required to ensure employers have enough staff to man their shops and factories.
One upside of the staff shortages is that wages for those employed in catering and hospitality are increasing disproportionately to other sectors of the economy, with average weekly earnings in the UK in May 2021 growing by 9.9 per cent, compared with the same month in 2020.
Wage inflation is not the only inflationary pressure on our economy, as anyone who has tried to buy building products from their local builder's merchant will know, the prices of numerous items have been increasing substantially.
There are shortages of numerous products, with wood and timber products especially difficult to obtain. Figures released last week showed the consumer price index (CPI) measure of inflation rose sharply to 2.1 per cent in May with the Bank of England expecting it to increase to over 3 per cent for the rest of the year. Although some, including the Economist, say that government figures under report the true levels of inflation.
On a more positive note, the traditional marching season has passed off relatively quietly and the EU has paused its legal action against the UK for alleged breaches to the Northern Ireland Protocol.
The standstill period will hopefully allow time for our politicians to amend the agreement to minimise the downside of the Irish Sea border, but also to promote that fact that we have unfettered access to both the UK and Europe and use that advantage to bring much needed jobs to Northern Ireland.
The outlook for the remainder of the year is positive and we expect growth in activity in all sectors of the commercial property market as we start to see the effects of the pandemic dissipate.
Declan Flynn (email@example.com) is managing director of Lisney (www.lisney.com) in Belfast