The latest tender price forecast from Davis Langdon & Everest showed a 0·5% fall in prices in the first quarter of 2001, ending a run of five successive rises. However, prices have still risen 7% over the past 12 months.
Demand for labour, the largest single factor in price inflation over the last three years, has stabilised, says DLE. Pressure has eased in particular for bricklayers in response to a slowdown in new housing build applications.
Tender prices are still expected to rise this year by 3-5% and 3-6% next year. Total construction output is predicted to rise 2-2·5% this year and 2·5-3% in 2002, so long as public non-housing projects compensate for a slowing private sector. The Government's promised spend on infrastructure announced by Nick Raynsford will thus prove a welcome fillip.
Retail is set for a boost as supermarket chains launch expansion plans, but most growth will be in repair and maintenance.
The US slowdown could seriously affect construction workload in the UK, says DLE; there are already examples of US clients pulling out of build commitments.
Source
Electrical and Mechanical Contractor
