The wider economy seems unlikely to fall into a deep recession but will shrink slightly in 2023. Stagflation is perhaps the best that can be expected as high inflation and interest rates will persist throughout the year.
However, while housing sector output is expected to decline sharply, demand in other sectors should hold up. Labour will replace materials as the main cost driver, but the reduced availability of work will see just a gradual rise in tenders throughout the forecast period.
Tender prices in 1Q2023 rose by 1.1% compared with the previous quarter, representing an 8.6% increase on 1Q2022.
Annual growth in tender prices is expected to slow, standing at 2.9% in 1Q2024.
It is not until the last three years of the forecast period that tender prices are likely to rise faster than costs. Tender prices are forecast to rise by 17% in the five years to 1Q2028.
Tender Prices, Building Costs and Material Costs (BCIS TPI, GBCI and Materials Cost Index annual increase 1Q to 1Q, output is based on the whole year on whole year)
The full forecast of prices, costs and demand is available in the Briefing section of the BCIS online service BCIS Online – Building Cost Information Service Online.
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