BCIS tender price index – estimate of tender price inflation

Tender price index, estimate of tender price inflation, 3Q2026

Tender prices increased by an estimated average of 0.7% between 2Q2026 and 3Q2026, resulting in annual growth of 3.2% in the BCIS All-in Tender Price Index (TPI)⁽¹⁾.

The estimate is the consensus of the BCIS TPI Panel at the mid-point of the quarter⁽²⁾, based on analysed Delphi survey results, and does not necessarily represent the views of individual participants.

Through their survey responses and in discussion, panellists pointed to various pertinent factors in the industry and wider financial climate impacting on tender pricing.

Appetite to tender 

More than three-quarters (77%) of survey respondents said contractors were eager to tender in the third quarter, up from 67% in 2Q2026. A further 15% reported being able to secure their desired number of suitable tenderers after searching.

According to the panel, softer demand and a limited number of opportunities in certain sectors contributed to the stronger appetite to tender during the quarter.

In some cases, contractors are competing more intensely for well-designed projects as they seek to secure their order books. However, the panel noted regional variations in appetite, with some transmission projects in the outlying areas of Scotland reportedly struggling to attract multiple bidders.

Project pipeline

Panel views on the project pipeline were mixed in the third quarter. The majority (54%) of survey respondents said they expected their pipeline to increase slightly over the next 12 months compared with the previous year, up from 40% in 2Q2026.

The panel reported relatively plentiful opportunities in the commercial refurbishment and cut-and-carve markets, while increased activity is also expected in the defence sector following recent spending announcements. New opportunities are emerging in the utilities sector too, supported by investments in water and energy infrastructure.

Further commentary highlighted continued strong demand for data centres. However, the panel stressed that constraints on grid capacity are hampering project delivery in the UK and weakening the competitiveness of the domestic market, putting some projects at risk.

New residential work, particularly in the private sector, remains limited. Anecdotal evidence pointed to a reduction in private residential opportunities in the South West, notably within the build-to-rent and co-living sectors. Investors and developers reportedly remain cautious about progressing new Grade A commercial developments in regions outside London too.

Materials

Panel commentary reinforced the uneven impact the Middle East conflict has had on materials cost inflation. Views on steel were mixed, with some suggesting a limited impact on package costs to date where others underlined an increase in steel prices since the outbreak of the conflict.

Elsewhere, panellists noted that concrete prices, which had fallen prior to the conflict, have since returned to earlier levels. Prices for oil-derived products, including plastics, pipes and paints, as well as bituminous materials, have also reportedly increased.

Anecdotal evidence suggested that copper prices are around 10 to 20% higher than expected in some cases. Package costs are also being affected by rising prices in specific areas, including sprinklers, M&E, security and specialist labour.

Labour

On labour, the panel discussed a recent report from the Construction Industry Training Board, which suggests workers are becoming less willing to travel for work due to work-life balance considerations.

Members also noted some spare capacity in the market, which, combined with the absorption of higher costs and pent-up demand, could make the current environment an opportune time to build.

However, the panel highlighted construction insolvencies as a significant risk, particularly among M&E subcontractors, with potential implications for project delivery and cost stability. Failures among some modern methods of construction (MMC) contractors were also noted.

These pressures are being compounded by strong demand from M&E-intensive sectors, particularly data centre construction and the New Hospital Programme, which are competing for specialist capacity and placing additional cost pressures on other parts of the market.

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Panel members

The current BCIS TPI Panel members are:

• Arcadis
• Craig Short, Rohan Short
• David Hughes, Calfordseaden
• Don Patterson, Equals Consulting
• Gavin Murgatroyd, Gardiner & Theobald
• Gleeds
• Max Wilkes, AtkinsRealis
• Nigel Hawes, exigere
• Nitesh Patel, Turner & Townsend
• Pablo Cristi Worm, AECOM
• Paul Beeston, Rider Levett Bucknall
• Paul Goldstraw, WT Partnership
• Peter Maguire, WT Partnership
• Rachel Coleman, Turner & Townsend alinea
• Richard Hill, Currie & Brown
• Robert Ray, Frankham Consultancy Group
• Samuel Hughes, Mace
• Simon Cash, Artelia UK
• Steve Waltho, Turner & Townsend
• Stuart Wigley, Baily Garner LLP

Notes

⁽¹⁾ The BCIS TPI Panel estimate has been applied to the previous quarter index and rounded to the nearest whole number for publication.

⁽²⁾ BCIS has recruited a panel of practising cost consultants from firms involved in multiple tenders to, in each quarter, provide an early estimate of tender price movement in the latest quarter based on a panel (Delphi) survey approach. For further details see: BCIS Tender Price Index Panel.

Basis of the All-in BCIS Tender Price Index

TPI figures prior to 4th quarter 2018 are based on project indices, generally single stage, traditional procurement, average value < £5million, (minimum £100,000, no maximum).

Excludes M+E and other specialist trades, e.g. facades. BCIS has assumed this reflects market projects let on single-stage Design and Build and Specification and Drawings.

Indices are normalised for location, size and procurement. Percentage changes are mid-quarter to mid-quarter.