Industry Tender Prices Insight

Industry Tender Prices Insight

For the final quarter of last year it has been reported that, surprisingly, tender prices have remained unaffected since the quarter coming previously, yet prices have been reported to sit 5.4% higher than they were on year previously. These figures a yearly inflation of prices which sits at almost half the value we’re used to, giving a positive indication of effective workload management at leading contractors despite surging amounts of work – a clear highlight of how well the industry is starting to perform.

The report, put together by the BCIS, highlights its predictions of tender pricing increasing by some 3.3% over the course of the upcoming year, with further increases of 4.5-5.5% each year thereafter up to 2020 (perhaps even further). Additionally, it has been reported that the prices for materials actually fell by some 1.1% in the penultimate quarter of last year when compared to the quarter previous, with it coming in at 2.3% on a yearly basis. This has been perceived to be countering inflation of 1.1% during the same quarter of last year, and can be partially attributed to the sudden fall in crude oil and steel billet prices which will have contributed to the fall in material pricing.

Yet, despite the recent fall in pricing, it has been estimated that the yearly rate at which pricing for materials will change will sit at around 2% by the final quarter of the year, then surging to circa 4% year-on-year for the next four years.

Also, wages have been predicted to grow by 3-4% year-on-year for the next five years, with input costs expected to match this same rate of growth. This also sits well alongside the expected growth to be seen in new work output, which is expected to persist with its present growth rate and hit around 4% growth for this year, 3% next and back up to 5% by 2020.

Industry Tender Prices Insight
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Industry Tender Prices Insight
BDC July 2022 issue - 294

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