In our quarterly construction outlook webinars, we examine the current state of the industry, looking at the economic and political backdrop to the built environment, as well as looking forward to the next 12 months and beyond.
This quarter, the industry is facing a particularly complex mix of pressures. Ongoing conflict in the Middle East continues to keep energy and materials costs elevated, adding to construction cost inflation at a time when workloads remain subdued and competition for projects is strong. How much of those higher costs contractors are able to pass through into tender prices, and how much they are absorbing through tighter margins, will be a key focus of the session.
We also look at the wider economic environment following the Bank of England’s latest decision to hold Bank Rate at 3.75%. With inflationary risks increasingly tilted to the upside and three members of the Monetary Policy Committee voting for a rate rise, what could the path for interest rates mean for investment and construction demand over the coming year?
Against this backdrop, the sector is also approaching the Autumn Budget on 28 October. Housing activity remains under pressure, while the picture for infrastructure is increasingly uneven, with stronger activity in areas such as water and energy contrasting with weaker parts of the market. With competing demands on public spending, the Budget could have important implications for which projects move forward and where construction opportunities emerge.
We report on the latest movement in construction input costs, tender prices and output, exploring what the data tells us about the pressures facing different parts of the industry. We also present BCIS’s updated five-year forecasts.