Latest Tender Price Estimates Yearly Increase of 4.3%

THE LATEST ESTIMATE for the BCIS All-in Tender Price Index (TPI) shows an increase for quarter four of 2021 (Q421) of 4.3% in the year from 4Q20.

The quarterly rise shows a 1.5% increase between 3Q21 and 4Q21.

Tender Price

The estimate is the consensus of the Building Cost Information Service (BCIS) Tender Price Index panel agreed there has been a settling of prices in the last quarter of 2021, compared to the second and third quarters.

The panel reported a slight drop in Overheads and Profit to 5.2% from 5.9% in the previous quarter.

Margins Compressed

Input cost pressures were not fully represented in tenders suggesting that margins are being compressed down the supply chain. The panel was concerned that some contractors might be taking a view that the situation will settle down.

There is still hunger in the market in some places as contractors seek to fill their order books for next year, but tenders are showing a wide range.

The general price increase masks regional and sector variations.

Productivity

Site productivity continues to improve, going up to 96.2% of the pre-COVID 19 levels in November 2021. However, there are concerns about another ‘ping-demic’ if the Omicron variant takes off.

Labour to be a Key Cost Driver

Looking at the challenges for 2022, it was agreed that labour is set to be one of the key cost drivers. With the high cost escalations, some contractors are unable to deliver on agreed commitments, this is likely to continue into the next year. Repayment of COVID loans and removal of support is also expected to increase pressure. Should big infrastructure projects announced by the government go ahead, there will be a big impact on labour and material availability.

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