Lack of orders adds pressure to UK tender prices

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RLB’s weighted average tender price index (TPI) forecasts a 3.03% increase for 2025, down slightly from its previous projection of 3.22%.

While Office for National Statistics data showed overall output up 1% year-on-year to June and 1.7% over the past six months, RLB described growth as “patchy”. Repair and maintenance work and a modest 1.3% rise in housing activity underpinned the output growth. Meanwhile, there was limited expansion in new orders outside of infrastructure.

RLB noted that the lack of new projects is forcing contractors into tighter, more competitive bidding, a trend that could heighten risks for project delivery. The firm also pointed to similar downward adjustments in input costs recorded by the Building Cost Information Service (BCIS), reflecting wider economic weakness.

Looking ahead, skills shortages remain a concern. The Construction Industry Training Board (CITB) forecasts the need for 48,000 additional workers annually over the next five years. Any surge in workloads could exacerbate labour constraints, pushing costs upwards, RLB warned.

It forecast tender prices in 2026 to remain broadly in line with 2025, even if government-backed schemes bring further activity to the market.

Roger Hogg, chair of RLB’s global research committee, said, “Our construction market intelligence points to a sector that remains largely stagnant, with growth driven by public sector projects while private investment stays cautious in light of ongoing macro-economic uncertainty. The pipeline of government work could act as a double-edged sword – stimulating demand but also triggering cost pressures that risk driving tender price inflation.”