QSs say sudden collapse in tender price inflation is beginning of the end of the boom.
The rapid acceleration in tender prices has ended, prompting predictions that construction may be heading for a slowdown.

The latest tender price forecast from QS Davis Langdon & Everest show that tender prices fell 0.5% in the first three months of this year. Prices increased 3.6% in the final quarter of 2000 and nearly 10% throughout last year.

Barrie Tankel, chairman of QS Barrie Tankel Partnership, said the easing in tender price rises was the first sign of the US slowdown affecting the UK market.

He said: "It's indicative that people are concerned about what is going on. The downturn is definitely showing itself and the fall-off is apparent because the tender market is a good market." Tankel said a reduction in the amount of work available forced down tender prices as contractors competed for the work. He predicted that tender prices would not accelerate again until at least the turn of the year.

People are concerned. The downturn is definitely showing itself

QS Barrie Tankel

He said: "I think we are going to see some further bad news out of the USA and that will have an effect around the world." Vince Clancy, managing partner of the cost management arm of consultant Turner & Townsend, said the slowdown in tender price increases was partly down to contractors looking to fill up their order books as the threat of a downturn loomed.

He said: "The acceleration we saw in 2000 has slowed. Contractors are very keen to fill order books up with a potential slowdown. They are keener to pick up work. Capacity has freed up due to less work in the high-tech, commercial and industrial sectors." DL&E cost research associate Peter Fordham agreed that the gloomy outlook had slowed tender price increases but said there was little to suggest tender prices would fall sharply. He said: "After the very substantial price hikes last year, this is a stabilisation." Fordham added that labour shortages had eased this year, which had also contributed to the slowdown.