Building tender prices are expected to increase at twice the level of inflation over the next five years according to a report by the Building Cost Information Service (BCIS).

Prices are set to increase by 27 per cent compared to 13 per cent in general inflation.

'The increase in tender prices reflects growing demand for new work and pressures from increases in input costs —input costs will rise by 21 per cent over the five-year forecast period,' said Peter Rumble, managing technical editor.

BCIS expects a slight fall in new work output in 2001, a repercussion of the fall in orders in 1999.

But, aided by funds identified in last year's Comprehensive Spending Review and the government's 10-Year Transport Plan, it expects output to rise in the following four years.

Rumble said that a recession could not be ruled out. However, 'it has been assumed that the economic slowdown in the US will recover before the UK economy starts to dip — a recession is unlikely in the forecast period,' he added.

Source

The Facilities Business