Tenders set to keep falling until 2011

Citation

(2010), "Tenders set to keep falling until 2011", Structural Survey, Vol. 28 No. 2. https://doi.org/10.1108/ss.2010.11028bab.008

Tenders set to keep falling until 2011

Article Type: Newsbriefs From: Structural Survey, Volume 28, Issue 2

Keywords: Construction, Forecast, Prices, Trend

Tender prices for new construction work may not start rising until 2011, and will not return to pre-recession levels during the forecast period, says the latest five year forecast from the BCIS (RICS’s Building Cost Information Service). Tender prices are predicted to fall a further 1.8 per cent in 2010, before returning to 3.3 per cent growth in 2011. Such decreases will be a result of sharp declines in new work output through 2009, with slower falls expected in 2010 before returning to modest growth in 2011. However should the recession in housing, industrial and commercial in the private sector be more drawn out than predicted in the central forecast, with growth not returning until 2012, then the price of new construction work will continue to fall through 2011 at a rate of 1.9 percent. A cut in public spending would have a similar effect on tender prices, meaning tenders would suffer around a 15 per cent peak to trough fall over a period of four years.