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BCIS infrastructure forecast

Published: 21/12/2023

BCIS produces five-year construction industry forecasts, covering projected 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 Civil Engineering Trends and Forecasts online service.

BCIS infrastructure forecast – 3Q2023

BCIS has outlined its expectations for the infrastructure sector, set against the impact of inflation and economic headwinds, which are expected to lead to muted growth over the next two years.

New work infrastructure output is expected to increase by 4.6% in 2023; however, it is expected to contract by 0.6% next year, mainly driven by a decline in the electricity and roads subsectors. Overall, output is forecast to rise by 9% over the next five years.

Civil Engineering costs are forecast to rise by 15% in the next five years, mainly driven by increased labour costs, while tender prices are expected to increase by 16.8% in the same period.

Annual materials’ cost inflation, as measured by the BCIS Civil Engineering Materials Cost Index, entered negative territory for the first time in three years in 3Q2023 – dropping by 2.5% in comparison with the same time last year. BCIS forecasts the growth to slow further in 2024.

Labour costs, on the other hand, remain elevated. The BCIS Civil Engineering Labour Cost Index increased by 7.3% in 12 months to 3Q2023, the highest annual increase since 2Q2006.  As the majority of wage awards rose in line with inflation, BCIS expects the pace of the annual growth in the index to slow in 2024.

Source: BCIS, ONS

The full details of the forecast are available in the BCIS Civil Engineering Trends and Forecasts online service.

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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.

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