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Published: 23/06/2025
Civil engineering tender prices increased by an average of 1% between 1Q2025 and 2Q2025, according to a recently established panel.
The BCIS Civil Engineering TPI panel has been formed to advise on the latest movement in tender prices, i.e. prices agreed between client and constructor at commit to construct, and to inform quarterly updates to the BCIS Civil Engineering Tender Price Index.
Comprised of cost consultants from firms involved in multiple civil engineering tenders in the UK, the panel also provides commentary on conditions affecting pricing levels on civil engineering projects.
Panellists reported that civil engineering prices are rising faster than in general building work, mainly due to pent-up demand and greater selectivity from the supply chain. However, the picture is mixed across sub-sectors: panellists reported aviation and energy are currently hot markets, while investment in roads and water has yet to fully kick in. Rail is cooling, with some UK capacity reportedly shifting to Ireland to support major programmes like DART+ and MetroLink.
Dr David Crosthwaite, BCIS’s chief economist, said: ‘Despite infrastructure commitments signalled in the Spending Review, with the forthcoming Infrastructure Pipeline update yet to be revealed, the market remains in a holding pattern. Panellists anticipate a gradual increase in tendering activity in the second half of 2025 and broader market momentum once pipeline clarity improves.’
Contractors’ appetite to tender was described as flat, with panellists noting that risk appetite continues to be a key factor. Panellists reported larger or more complex projects are proving harder to procure, particularly under single-stage procurement routes, and contractors are increasingly selective about who they work with and on what terms. Clients aiming to progress major programmes are advised to present themselves as ‘clients of choice’, particularly in terms of risk transfer and programme certainty.
Dr Crosthwaite added: ‘Labour remains the primary cost pressure while, in contrast, materials inflation has stabilised, with some panellists reporting steel prices have returned to pre-Ukraine invasion levels. Lead times and availability are generally stable, and it was encouraging to hear that the supply chain is more agile and better equipped to respond to changing market conditions than it was five years ago.’
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