Tender prices to return to pre-crash level in 2017

Aaron Morby 10 years ago

Tender prices will not make up the 20% eroded during the crash for another three years.

According to the AECOM’s Tender Price Index average annual tender price inflation, across all sectors, will rise by 3.9% this year.

If tender prices then rise as predicted the UK will have endured a 10-year wait to return to peak construction prices.

Construction inflation figures, which are based on tender movements in the Capital, actually slowed a little in the first quarter of the year.

Competitive supply and install rates for reinforcement (£950- £1,050/tonne); reinforced concrete (£135-£155/m3); steelwork universal sections (£1,400-£1,500/tonne); and steelwork hollow sections (£1,650-£1,850/tonne), remain broadly similar, or only marginally higher to those tendered in mid-2013.

But growing capacity constraints as activity rises in the Capital will feed growth of 3-5% annually, the cost consultant forecasts.

Higher demand for skilled labour has pushed up labour rates, which typically range between £140 to £170/day for bricklayers.

Day rates for joiners have seen recent increases too, and
range between £140 and £180/day.

Simon Johnson, director of strategic projects at AECOM, said: “In the middle of all the good news about the economy, there are obvious concerns about the risk of higher than expected price inflation in the construction industry.

“But our research indicates that in the first quarter of 2014 this is not occurring as quickly as other headlines announcing 7% inflation and £100,000 bricklayers have suggested.

“Whether this is reflective of a shift in the underlying trends, or simply a pause, will become clearer as we move through 2014.”

Between 2008 and 2012 tender prices dropped 20%. Today’s results show that tender prices in Q1 2014 have risen 4.1% since slumping to a low at the end of 2012.

AECOM’s building cost index continues to rise, albeit at a lesser rate of 1.8% year on year in Q4 2013 compared to 3% in Q3 2013.

Latest news

A2Dominion reins in new-build and cuts development team

Housing association to stop private new build sales in big strategy switch
59 mins ago

Sellafield partnership appoints final key delivery partners

Altrad and Kaefer bag £180m access, insulation and painting deal
58 mins ago

Go-ahead for Milton Keynes’ largest private rental project

Platform_ to build 20-storey scheme of 335 flat next to train station
14 mins ago

Health centre canned as build costs double in four years

Devon NHS stands down plans for Health and Wellbeing Centre in Teignmouth
1 hour ago

Family confirm death of Des O’Rourke

Deputy chair and co-founder of Laing O'Rourke dies aged 75
18 hours ago

Plans approved for major phase of £2.5bn Salford Crescent

Crescent Innovation will help create global research hub
2 hours ago

Deal to kick-start 3,000-home Northstowe town centre

Labour Government acts to unlock next phase of new town near Cambridge
9 hours ago

Striking new-look for Canary Wharf HSBC tower

Large chunks of upper floorplate to be removed in major overhaul
1 day ago

Kier halves debt to £115m after strong trading year

Order book up 7% to £10.8bn with 85% of work secured for year ahead
1 day ago

Developer blasts “unfair” power charges on huge Liverpool site

Romal Capital unhappy about site power hook-up costs
1 day ago

Regal to start Wembley 1000-bed student scheme

Backer found to deliver £400m twin tower student scheme
1 day ago

Breyer Group bags £163m housing repair deal

Major repair and maintenance win from Kingston Council
1 day ago

VolkerFitzpatrick lands Piccadilly Line upgrade deal

Contractor to work on Cockfosters depot
1 day ago

26 face fight to renew spots on £1bn NEPO civils deal

Next generation framework to start in March 2025
2 days ago

Go-ahead for £170m King’s Cross life sciences office project

Innovative arched design to carry landmark building over railway tunnels
2 days ago

Mitie buys power contractor ESM for £8.5m

Building FM firm strengthens high voltage contracting offer
2 days ago

New vision unveiled for £5bn Liverpool Waters

More housing included in central docks area after Labour £55m funding boost
2 days ago

String of contract wins sees turnover surge 25% at Mace

Construction division sees revenue leap to £1.73bn
2 days ago

Morgan Sindall wins £32m Walsall waste centre

Contract will transform former metal factory site
2 days ago

Kier wins £30m Greenwich teaching block

London South East Colleges plans to spend £47m on Greenwich Campus redevelopment
2 days ago

Blenheim House Construction applies for administration

Surrey contractor employs around 80 staff generating £87m turnover
3 days ago

GMI chief jumps to Henry Boot Construction

Lee Powell will replace Tony Shaw as MD when he leaves at the end of 2024
3 days ago

Avant Homes makes £109m loss

House builder reveals huge loss just days after entering Crest Nicholson bid race
4 days ago

Greggs unveils plans for giant distribution centre

Bakery giant to build 311,551 sq ft logistics centre in Kettering
3 days ago

£330m south east London 1,250 homes scheme approved

Outline planning for New Belvedere development near the Thames
3 days ago

Green light for Birmingham 1,200-bed student scheme

Cambrian Wharf project will rise to 14 and 35 storeys
3 days ago

Welsh fit-out specialist files administration notice

£30m turnover employee-owned Paramount D&B lodges court notice
4 days ago

Skanska signs £105m London Millbank office rebuild

Original 1915 building facade will be dismantled and rebuilt
4 days ago

Historic facade contractor goes into administration

Administrator seeking buyer for Charles Henshaw & Sons
7 days ago

Three-year HS2 station box excavation completed

Enough clay to fill 300 Olympic sized swimming pools removed from Old Oak Common site
4 days ago

Contractor services