BCIS Tender Price Index.

Contractors can expect workload to increase in 2007 restoring confidence in market
According to the latest Tender Price Index compiled by BCIS the price of new construction work rose in the year to 4th quarter 2006.

Peter Rumble, Managing Technical Editor, BCIS said:

"With new work output having increased by 5% in 2006 as a whole, and with an above trend increase expected in 2007, tender prices are likely to continue to rise next quarter as contractors’ confidence continues to return to the market."

However, there are some mixed signals from the trade surveys.

The Construction Confederation reported that, on balance, there was a significant increase in enquiries in 4th quarter 2006, and that contractors were expecting workload to increase next quarter.

The Federation of Master Builders reported static enquiries in 4th quarter 2006, and that contractors were not expecting a change in the level of workload in 1st quarter 2007.

New work output is expected to rise well ahead of trend over the next three years.

It is anticipated that the private commercial and infrastructure sectors will be the main contributors to growth over the forecast period, with work on the 2012 London Olympics starting to make an impact from 2007.

Managing Technical Editor, BCIS Peter Rumble continued:

"Above trend increases in new work output and upward pressure from increased input costs, are expected to result in tender price rises well ahead of general inflation over each year of the forecast period."

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