BCIS finds price rise could outstrip general inflation over two years
The price of new construction work has risen steadily in the first quarter of 2007, but that this is behind the level of general inflation according to early results released by the Building Cost Information Service (BCIS) tender price index.
Peter Rumble, BCIS information services manager, said: "With new work output expected to rise well above trend in 2007, together with rising orders and enquiries in first quarter 2007, and with contractors expecting workload to increase in second quarter 2007, it is likely that tender prices will continue to rise next quarter."
According to the report, new work output is likely to rise significantly faster than the trend over the next three years. The private commercial sector is expected to be the prime contributor to growth over this period, through the offices sub-sector, PFI projects and venue work for the 2012 Olympics.
Rumble added: "Tender price rises are expected to outstrip general inflation over each of the next two years, as a result of new work output increasing significantly above trend throughout the forecast period, and upward pressure from increased input costs."