Sharp Rise in Tender Prices
BCIS Tender Price Index – Forecast to Q1 2010
The price of new construction work rose sharply in Q4 2007 with tenders rising well ahead of general inflation, says the latest Tender Price Index compiled by BCIS (Building Cost Information service).
Despite strong growth in new work output last year, the growth rate is expected to slow in 2008, partially as a result of the recent credit crunch; some investors are delaying or cancelling schemes that were in the pipeline. However, there should be sufficient work in 2008 to keep growth above trend.
New work output is likely to grow a little faster than trend in 2008, rising more steeply in 2009, before slowing to a little behind trend in 2010. 2009’s rate of new work output growth will rise mainly as a result of strong growth in public sector funded schemes, particularly in the infrastructure and public non housing sectors. With public sector growth slowing in 2010, total new work output growth is also expected to slow down.
Peter Rumble, BCIS Information Services Manager comments:
“Despite contractors being a little nervous about the level of workload in Quarter 1 this year, tender prices are likely to rise on the back of strong new work output growth in 2007 as a whole, and the expected above trend growth through 2008.
“Tender price rises are expected to continue to significantly outstrip general inflation over each year of the forecast period, as a result of above trend increases in new work output and pressure from input cost rises.”
- ENDS -
Notes for editors:
The full report 'Indices and Forecasts' can be purchased for £180. To order a copy, order online, T +44 (0)870 333 1600 (select option 2 for BCIS) quoting item code 4360, or email sales@bcis.co.uk.
The data is also available via a subscription to BCIS Online - BCIS' capital cost database. Copies of the printed reports are sent to all online subscribers. Contact BCIS for a free demonstration - T +44 (0)20 7695 1500.
The forecast is based on the timely release of public funds.
About RICS
RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 140,000 members globally and represents, regulates and promotes the work of property professionals throughout 146 countries. RICS is governed by a Royal Charter approved by Parliament which requires it to act in the public interest. It is also a professional regulatory body approved by Government (HM Treasury).
About BCIS
BCIS (Building Cost Information Service) publishes information on the capital cost of new and refurbished work collected from Chartered Quantity Surveyors and others working in the building industry. BCIS is a trading name of RICS and was established in 1962 to exchange detailed building price information.
For further information, please contact:
Claire Barratt
Press Officer
RICS Communications
T: +44 (0)20 7334 3736
