BCIS tender price index – estimate of tender price inflation

Tender price index, estimate of tender price inflation, 2Q2026

Tender prices increased by an estimated average of 1.0% between 1Q2026 and 2Q2026, 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 

Two-thirds (67%) of survey respondents identified contractors as eager to tender in the second quarter, while 20% reported being able to secure their desired number of suitable tenderers after searching. None reported being unable to get contractors to tender.

Discussions suggested that the level of competitive tendering is often influenced by the strength of individual contractors’ order books and their ability to secure workload over the next 12–24 months.

Panellists noted an increase in contractors seeking to bolster their order books, with competition intensifying as the flow of new work slows. This has reportedly resulted in greater willingness among contractors to pursue single stage bids and an increased likelihood of contractors absorbing cost increases in order to secure projects.

However, conditions across the market remain uneven. The panel reported that tier one contractors and larger firms continue to see healthy pipelines and stronger financial performance, while pressures are becoming increasingly concentrated among smaller contractors and specialist subcontractors.

Project pipeline

Panel views on the project pipeline were mixed in the second quarter. 40% of survey respondents said they expected their pipeline to increase in the next year compared with the previous 12 months. This was down from 77% in 1Q2026.

One-third reported no change while 27% said they expected a slight reduction.

In commentary, the panel compared current market conditions with those experienced during the outbreak of the war in Ukraine. A key distinction highlighted was the relative strength of demand.

The market was considerably more buoyant before and during the early stages of the Ukraine conflict, contributing to sharper price escalation. In contrast, demand conditions surrounding the Iran conflict are weaker, leading to expectations that price increases may not reach the same peaks experienced previously. 

Trades and materials

The panel reported evidence of increases in some materials and product costs.

Cost changes were noted across several energy-intensive items, including steel, glass, cement, bricks, aluminium, insulation, roof membranes and pre-cast concrete. In some cases, there was evidence that higher aluminium costs were being reflected in prices for aluminium-framed curtain walling.

Materials suppliers have reportedly indicated that they will be raising their prices. However, the panel noted uncertainty over whether these increases could be sustained if demand remains subdued.

Industry challenges

Other industry challenges raised by the panel in 2Q2026 included the limited capacity of tier one contractors, access to the grid, skilled labour shortages and higher fuel costs, the latter of which have led to increased costs for plant, haulage and site deliveries.

Some commentary cautioned that contractor margins have been squeezed to the point where cost increases can no longer be absorbed. Subdued demand and higher input costs reportedly risk a collapse in parts of the supply chain leading to a potential increase in insolvencies.

Planning and regulatory delays were also cited as a concern. The panel said these continue to drive cost increases, pushing back project milestones and undermining viability and industry confidence.

On the Building Safety Regulator, the panel pointed to an improvement in approval rates but suggested that Gateway 2 decision timelines are still affecting residential development.

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Panel members

The current BCIS TPI Panel members are:

• Alexander Bill, Gleeds
• Craig Short, Rohan Short
• David Hughes, Calfordseaden
• Don Patterson, Equals Consulting
• Gavin Murgatroyd, Gardiner & Theobald
• Ian Goodridge, Arcadis
• 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
• Simon Rawlinson, Arcadis
• 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.