Contractors will tighten their overheads in 2008 as a result of the credit crunch, consultant Davis Langdon has predicted.

Its report into the construction sector in 2007 said anxiety may change the way firms pitched for work.

The report commissioned by Building, said: “There may be more interest in single-stage tendering than before by contractors who may be nervous about the market.”

New orders in the second half of 2007 were down on the first and were worth 7% less in real terms. The effects were felt in every sector equally.

But the report said increased spending in the public sector, particularly the Building Schools for the Future programme, would act as a further boost.