Tender prices have modestly risen by 0.5% this quarter.
- The Building Cost Information Service (BCIS) reports a 2.1% annual growth, down from 10.3% in Q2 2022.
- Contractor selectivity and risk aversion are influencing tendering processes.
- 62% of firms manage to find a suitable number of tenderers after searching.
- Positivity regarding the project pipeline is observed, with 69% expecting more tenders.
The Building Cost Information Service (BCIS) has reported a modest increase in tender prices of 0.5% between the second and third quarters of 2024. This uptick has contributed to an annual growth rate of 2.1% in the BCIS All-in Tender Price Index, a notable decrease from the peak growth of 10.3% witnessed in the second quarter of 2022. Such figures indicate a stabilisation in tender price growth, reflecting the current market adjustments.
The BCIS chief economist, David Crosthwaite, highlighted that contractor selectivity and an inclination towards risk aversion are currently affecting tendering processes. There is a widespread expectation that the forthcoming autumn budget may prove pivotal for project approvals, marking a potential turning point. Although the general election has resolved some uncertainties, much remains contingent on governmental fiscal announcements.
A survey conducted by the BCIS found varied experiences among contractors regarding the ease of obtaining tenders. Notably, 62% of respondents reported success in locating a desired number of suitable tenderers following an exhaustive search. Meanwhile, 23% encountered challenges, and 15% found it easier, reflecting a mixed but not overly negative sentiment in the industry.
A positive outlook on the project pipeline was also reported by the BCIS, with 69% of respondents indicating a slight increase in their anticipated pipeline of projects expected to go to tender over the next year compared to the previous one. The remaining participants noted either no change or a slight reduction, suggesting that while some sectors may face hurdles, overall confidence is tepidly improving.
The tender price landscape suggests stabilisation with cautious optimism for future growth.
