Tender price indicator
Elements of uncertainty are creeping into the economic outlook with the Brexit referendum and global slowdown. 2016 will see continued demand for construction from a supply constrained industry maintaining levels of tender price increase, not yet reflecting any significant slowdown or caution from the uncertain outlook.
UK average rates of tender prices are unchanged at 4% for 2016 and 3½% for 2017, with a levelling off in 2019.
The North West is forecast to rise ahead of the national average in 2016 and 2017, with London and South East continuing to dominate with strongest demand in effectively a two tier national market.
Over the quarter the Pound has weakened across currency markets - the biggest impact to construction being a 15% drop against the Euro. As circa 60% of construction components are imported from the Eurozone, we see this compounding forward pricing.
The Consumer Price Index (CPI) measure of inflation moved to 0.3% in January 2016 up from 0.20% in December 2015. Although food and fuel prices fell in January they did so by less than the same month in 2015 pushing the inflation rate higher.