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BCIS: Tender prices fall 16pc from peak

According to the latest report from the Building Cost Information Service, tender prices have fallen 16 per cent from their peak, in the final quarter of 2007.

According to the report, the recession in the industry is now over, with new orders for the sector increasing 1 per cent in the first quarter of 2010. Compared to the first quarter of 2009, sector orders are up 29 per cent.

Despite the positive new orders figures, tender prices in the industry fell again in the first quarter, by 0.5 per cent.

During the first three months of the year, materials costs rose by 1.7 per cent, whilst nationally agreed wage rates rose 1.9 per cent.

the report suggests that new work output is expected to fall at a much slower rate in 2010 than the sharp fall experienced in 2009, and be followed by two years of modest growth. It also anticipates that in 2010, the private sector with continue in recession, but public sector work will continue to grow. 

Information services manager at BCIS, Peter Rumble said: “There are some concerns that private sector output growth will not have gained enough momentum in time to outweigh the cuts in public spending, a scenario that could lead to a ‘double dip’ or prolonged recession in the construction industry.”

“However, currently BCIS is expecting a further small fall in tender prices in Q2 2010, followed by a stagnation in prices for the remainder of the year.  A small rise in tender prices is expected in the year to Q2 2011, rising more or less in line with input cost increases over the following year, as a slow recovery in new work output gets underway.”