RLB raises tender price forecast for 2023

Rider Levett Bucknall has raised its tender price forecast for the year to reflect better-than-anticipated market confidence and stubbornly high inflation rates. 

The consultant’s Q2 tender price forecast predicted a 4% uplift across the country in 2023, an increase from the 3.5% scenario set out in its first quarter report. 

The figure would be a decline on the 7.2% it has estimated for 2022. It predicted the rate to fall to 3% in 2024 and 2025. 

Last month’s monetary policy report from the Bank of England, which declared that the UK had technically avoided a recession, provided “only a modicum of comfort” to the industry, according to Roger Hogg, research and development manager for RLB 

In construction, it said, “the overall picture is one of continuing stress in labour and materials markets, together with the prospect of possibly more upcoming public sector workload on HS2, schools and hospitals programmes”. 

Activity levels remain high across the country, despite unresolved concerns about supply chains, delivery delays, labour shortages and inflating costs, the report added. 

“Regions have noted the stabilisation of commodities prices and downstream materials prices, but stabilisation is not necessarily reduction,” it said.  

“As a result, the inflation that persists elsewhere in the economy applies to construction as well with, it would seem, little prospect of a fall in material costs.  

“With input costs at a high, bidders at contract and sub-contract levels are locked into higher bidding than some clients’ budgets may permit, yet still face the need for replacement workload.  

“Such situations are problematic for both clients and builders of all sizes.” 

The Yorkshire and Humber region experienced the highest tender price uplift last year, according to the consultant, with the North-west set to take that mantle in the years to come.