Rising labour costs have led to an unexpected surge in tender prices that has taken them above 1989 levels for the first time, according to the latest quarterly tender price survey from Davis Langdon & Everest.

Data from the leading QS shows that tender prices rose 1.8% in the first three months of the year compared with the previous quarter, resulting in a 5.8% rise in the past six months.

DL&E’s analysis quotes a daily rate for London bricklayers of £120, up 20% compared with six months ago. Materials prices, though, remained steady, up just 0.3% in the year to February.

The chief estimator of one £300m-turnover contractor agreed that tender prices in the South-east were up “by a couple of points above the retail prices index, mainly because of certain specialist subcontract trades experiencing shortages of operatives”.

The jump means that the DL&E’s tender price index (established in 1976 at a base of 100) has hit a new high of 348, three points above the previous peak, reached in November 1989.

However, Tony Williams, a director of QS WT Partnership, argues that tender prices have increased, but more slowly than DL&E suggests. “We’ve just had two projects in Coventry and the South-east with tenders about 3% more than we expected. There’s certainly a jump, but perhaps not the hike that DL&E are reporting”.