Tender Price Indicator
Elevated inflation across the globe has impacted every sector and UK construction is no exception. The post-pandemic rebound that was building prior to the conflict has come to a halt following broad-based inflationary pressures and the risk of stagflation or recession.
We are now four months into the Russia/Ukraine conflict and the world has a far better understanding of the disruptive impacts and costs that have stemmed from the war.
Global supply chains have become far more resilient and proficient at adapting to supply chain disruptions in recent years, but models are not equipped for continued uncertainty. There are still unknowns regarding the length and severity of disruptions and reinventing supply chains to accommodate for this is no easy task. Historically, Europe has been dependent on a number of Ukrainian and Russian-made materials and products and so the disruptive impact of the conflict has forced companies to seek alternative sources of supply. Trade sanctions and embargos applied against Russia has resulted in a global loss of supply for several key commodities, putting a strain on production capacity elsewhere and resulting in additional costs.
Our Tender Price Inflation report looks at the movement of prices in tenders for construction contracts in the UK. The report examines a number of contributing factors and is further informed by our market survey responses and contractor consultations. This forward forecast illustrates our view of annual tender price inflation.