Tender prices set to rise by a third, says BICS report
Civil engineering costs and tender prices are continuing to rise as the UK infrastructure market strengthens. According to the latest report by RICS' Building Cost Information Service (BCIS), tender prices are forecast to rise by nearly a third in the next five years.
The report, BCIS Infrastructure Briefing October 2015, said civil engineering costs rose by 0.7% in the second quarter of 2015 compared with the previous quarter, but remained unchanged compared with the same period last year. However, these costs are expected to over the coming five years along with tender prices and new infrastructure output as a whole.
Costs will rise 3.5-5% each year, with the price of materials and nationally agreed wage awards steadily increasing.
The report expects new infrastructure output to be "very strong" this year, remain static in 2016, and to fall by 2017 as the cycle of some major projects pass peak. It predicts moderate growth returns in 2018 and 2019, with growth rising "quite sharply" in 2020 as a result of increased investment in major roads schemes.
Peter Rumble, head of forecasting at RICS’ BCIS division, said: “With new infrastructure output set to be very strong in 2015, the annual rate of tender price increases is expected to rise in the second half of 2015 and the first half of 2016, resulting in an increase of 7.6% in the year to second quarter 2016. Over the next few years, tender price rises are anticipated to be driven primarily by increases in input costs, rising by 4% to 5%. as growth moderates and even falls in 2017. Over the final year of the forecast, stronger output growth in 2020, together with increasing input costs, are likely to lead to higher tender price rises in the year to second quarter 2020, with a rise of 6.2%.
"New infrastructure output is anticipated to be at a historically high level over the forecast period compared with pre-2010, with annual average growth of around 3.5% - a real positive for Britain and the economy.”
- New 2,300-property development near Edinburgh gets connected Scottish Water Horizons has completed work to connect the third phase of a new 2,300 property village near Edinburgh to... Read More >
- Group set up to develop standards for fibre deployment in wastewater network Five water companies have joined forces to launch a Technical User Group (TUG) which will create a set of guidelines for... Read More >
- GB ranked second for water and sewerage services A new international survey has revealed that the satisfaction rating for Great Britain's water and sewerage services is... Read More >
- A glass half-full? Bringing water costs down for utility customers Mark Bullock, Balfour Beatty chief executive officer for rail and utilities, says the water sector must change its... Read More >
- INWED 2019: 'Each step was driven by choosing work I enjoy' To mark International Women in Engineering Day 2019 on 23 June, Fiona Barbour discusses her journey to becoming Mott... Read More >
- Interview: Kier Utilities' water MD Nigel Dyer Kier Utilities' Nigel Dyer tells Robin Hackett how the company is evolving to meet the changing demands on the water... Read More >
- Comment: New tech and partnerships will up the ante on leakage Closer partnerships, technology and connectivity will be the key to tackling leakage, with collaborative delivery... Read More >
- The search for safer streetworks practices Amey Utilities' HSEQ director, Gerry Mulholland, explains how the company’s 2020 Challenge and Know What’s Below... Read More >