Tender prices softening as economy slows
Contractors are beginning to change their procurement activities in response to the slowing economy, according to Rider Levett Bucknall’s latest UK tender price forecast.
The consultant said that while only six months ago firms were “quite bullish” in their preference for two stage tendering, “the tide appears to be turning” in their willingness to entertain single stage procurement.
While programmes “appear to be slowing”, partly due to planning delays, investors are not shelving projects.
Instead, said the report, “it appears that investors and developers are biding their time to take advantage of the softening tender prices and perhaps even preferential procurement arrangements”.
RLB’s Q1 UK tender price forecast predicted 3.5% uplift across the country in 2023, slightly below the 3.8% most likely scenario they set out at the end of last year.
Tender prices were forecast to drop further to 2.9% in 2024.
Despite having experienced the lowest level of up lift in 2022 (6%), according to RLB, Wales is set for the highest rates of any region covered by the consultant over the coming years.
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