The latest Market View Report from consultant EC Harris warns that falling workloads will continue to force tender prices down with a 1.1% fall predicted for the year to the second quarter of 2012.

Prices will finally rise by the first quarter of 2013 by 0.5%.  Following this EC Harris anticipates that prices will remain very flat, with no significant rise until early 2015.

Paul Moore, Head of Cost Research at EC Harris comments: “The fragile UK economic recovery has created a lack of confidence which is affecting the construction industry’s workload.

“Where workload leads, for example in London, prices will follow eventually.  However, clients buying at low tender prices now should be aware of the potential for supply chain failure as contractors seek to deliver on low tenders in the face of rising costs.”

The Market View warns that whilst the surge in global commodity prices in 2010 has now slowed, steel and oil prices are still higher than they were in January.

Prices for ready-mix concrete, steel and rebar delivered to site are up 10%, 8% and 5% respectively since this time last year, although steel prices have fallen by 3% over the last quarter.

The difference in activity levels between London and the rest of the UK is also expected to continue over at least the next two years.