The Building Cost Information Service (BCIS) is the leading provider of cost and carbon data to the UK built environment. Over 4,000 subscribing consultants, clients and contractors use BCIS products to control costs, manage budgets, mitigate risk and improve project performance. If you would like to speak with the team call us +44 0330 341 1000, email contactbcis@bcis.co.uk or fill in our demonstration form
Published: 03/07/2024
BCIS produces five-year construction industry forecasts, covering projected input costs, tender prices and output, and examining the latest construction market trends.
The quarterly BCIS infrastructure briefing is a civil engineering market report and presents our view of water and sewerage, electricity, roads, railways, harbours and flood defences, gas, air and communications, and infrastructure repair and maintenance output against a backdrop of civil engineering costs, including labour and materials, and the wider economic background.
The full briefing is available to subscribers of the BCIS CapX.
BCIS infrastructure forecast – 1Q2024 to 1Q2029
Civil engineering costs are forecast to rise by 14% over the next five years to 1Q2029, while civil engineering tender prices are predicted to increase by 22% over the same period, according to the latest forecast data from BCIS.
New work infrastructure output rose by 4% in 2023 but growth is expected to decline by 1.4% in 2024, before recovering from 2025. Output in this sector is forecast to rise by 16% over the next five years, driven by strong growth in the electricity sub-sector.
Dr David Crosthwaite, Chief Economist at BCIS, said: ‘Despite an anticipated decline in output in 2024 as some funding rounds in regulated sub-sectors enter their final stages, there is a strong pipeline of infrastructure work. Output growth is likely to be driven by work to enhance the UK’s electricity distribution network and water companies mobilising their biggest ever capital investment programmes.
‘The biggest threat to the sector is ensuring there is capacity to deliver. In publishing the National Infrastructure and Construction Pipeline earlier this year, the IPA estimated an annual average of 543,000 to 600,000 workers are required to deliver planned investment over the next two years. With widely reported skills shortages, it’s going to be a massive challenge for the next government to ensure the necessary workforce is available.’
On the input costs side, labour costs have continued to rise above inflation. However, as the majority of recently agreed wage awards have been more in line with inflation, the pace of growth in the index is expected to slow. The index is forecast to rise by 18% over the five-year period.
Civil engineering materials’ cost inflation continues to moderate, down from an annual peak of 30.6% in 2Q2022. Over the first quarter of 2024, the highest annual increases have been observed in ready-mixed concrete, cast and spun iron products, bricks and clay products, and gas oil fuel. Steel indices continue to record annual falls. BCIS forecasts minor growth in 2024, with a 14% increase between 1Q2024 and 1Q2029.
The full details of the forecast are available in the BCIS CapX.
To keep up to date with the latest industry news and insights from BCIS register for our newsletter here.
Quarterly updates to forecasts are published for infrastructure, building, and maintenance, cleaning and energy, while an annual update is published for the economic significance of maintenance.
