Tender prices are expected to remain flat over next six months according to BCIS index

The fall in tender prices has been all but halted by rising materials costs, and most contractors expect them to stay flat over the next six months, new data has suggested.

Tender prices fell 14% in the year to Q2 2009, but only fell 4% in the year to Q2 2010. They fell just 0.5% in the second quarter according to the latest UK construction tender price Index by the Building Cost Information Service.

Materials prices rose by 3.8% during the same quarter, and the BCIS expects sharp increases in materials costs over the next year.

BCIS said, “The upward push of the continued increase in resource costs is competing with the downward pull of uncertain future demand.”

A survey of contractors by the BCIS found that the majority of contractors expected tender prices to remain static over the next six months.