Mace predicts tender cost inflation

'The Scalpel' is a project held up by the recession, and now set to go ahead. Photo: WRBC
'The Scalpel' is a project held up by the recession, and now set to go ahead. Photo: WRBC

Tender price inflation is set to be pushed upwards as a number of shelved major construction projects in London are being brought forward by clients, according to contractor Mace.

 

Mace Cost Consultancy’s latest UK tender cost update for Q4 sees it revise its 2014 tender price inflation upwards from 4.5% to 5% by the end of the year.

 

The consultancy points out that continuing growth in the capital city means contractors are taking a more measured view about the jobs they go for.

 

This growth is expected to be good for employment prospects, with upward pressure on wages inevitable and likely to lead to increasing costs across the supply chain in the medium term.

 

Mace Cost Consultancy managing director Chris Goldthorpe added that firms are more “reluctant to engage in projects that are perceived as risky, either from a procurement or a construction point of view”.

 

Findings from the consultancy’s Q4 survey confirmed an improvement in the market that was established last year, with respondents reporting that workload over the last 12 months has increased by an average of over 20%. Outlook for the next 12 months is also positive with workload expected to increase by an average of 14%.

 

Tender price forecasts for 2015 and 2016 stand at 4.5% and 4.0% respectively as spikes in demand are expected to moderate and industry capacity increases.

 

Outside London Mace said there is sufficient capacity to meet demand generally. It added that continuing economic growth is expected to gradually increase demand for construction and allow contractors and supply chains to pass on cost increases as inflationary pressures start to reappear over the forecast period.

 

Survey respondents indicated anxiety about the availability of suitable labour and the likelihood of increasing costs in the medium term. There was also uncertainty about the possible effects of future interest rate rises and the 2015 General Election.

Please rate

Comments 

Ctrl + Enter

Most Read

Ten highest paying I.T jobs in 2019

Ten highest paying I.T jobs in 2019

The I.T industry is arguably the most in-demand industry for technology/Engineering professionals. Once you have the right skill and certification, the I.T industry will jump at the chance to employ you and grant you a befitting role. From application developers to Data Engineers, the sector is in

H2S: It’s an exciting time to be a civil engineer

H2S: It’s an exciting time to be a civil engineer

The High Speed Two (H2S) has been described as a game-changer and the greatest ever upgrade to Britain's railways, and without doubt, this United Kingdom’s high-speed rail project has been a hot topic. The H2S project aims to meet the United Kingdom’s high

The future of engineering in Artificial Intelligence

The future of engineering in Artificial Intelligence

Artificial intelligence (AI) is an aspect of computer science that is concerned with machine intelligence. Machine intelligence can be described as the theory and development of computer systems to have the capacity to carry out tasks that would ordinarily require human input or intelligence. Some

This website uses cookies to enhance your user experience. By continuing to use this site, you consent to our use of these cookies. See our Cookie Policy.