Tender price indicator
As the Brexit vote looms the potential for an unprecedented exit from Europe remains a possibility, uncertainty surrounding this is having an effect on investment which will impact construction demand.
Forecast for UK average rates of tender prices have remained constant at 4% for 2016 and 3.5% in 2017.
Demand in London remains strong driven by projects being completed, with tender price rises for mechanical, electrical and finishing trades driving a median increase of 5% in 2016 as the demand works through the pipeline. In contrast earlier trades, demolition and ground works have recorded spare capacity and lower pricing as they feel the effects of the uncertain outlook, which we forecast will lead to a tempering of the rate of inflation towards the end of the year.
Tender Price Change
The rise of construction input costs continues to outstrip the economy’s headline rate of inflation. Most indicators of building costs reflect input cost increases equivalent to more than ten times the headline CPI rate of inflation.
The Consumer Price Index (CPI) measure of inflation fell to 0.3% in April, down from 0.5% in March.