A tool designed for building professionals to help prepare top level cost plans, provide early cost advice to clients and benchmark costs for both commercial and residential buildings
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LoginPublished: 10/06/2022
The early estimate for the BCIS All-in Tender Price Index (TPI) for 2Q2022 shows a 3.5% increase on 1Q2022 indicating that tender price inflation will continue.
The resultant 2Q2022 TPI figure shows an increase of 9.1% in the year from 2Q2021*.
The estimate is the consensus of the BCIS TPI Panel** based on the analysed Delphi survey results, it does not necessarily represent the views of individual participants.
This quarter panelists reported a wide range of quarterly price movement between 1.5% and 7.5%. The response at the top of the range includes the costs of providing fixed prices, reflecting the long-term view in terms of cost uncertainty.
The panel reported overheads and profit at an average of 5.2% and mentioned that the introduction of fluctuations to a greater number of contracts may be maintaining overheads and profit levels.
The war in Ukraine continues to affect the industry. Materials shortages (for example structural steel, reinforcement, concrete, cladding), escalating prices and longer lead times result in increased requests for the use of fluctuations in contracts.
Appetite to tender has drifted to greater difficulty as contractors become more selective and put significant consideration into project complexity, client, procurement, and contract route before agreeing to tender. Whereas in the past the appetite to tender reflected contractors order books and demand, currently it reflects the inflation and supply risks involved in tendering. More information on this trend is available here.
The BCIS TPI Panel has agreed that the prices had been increasing strongly since January but had been the highest in the latest quarter.
*Note: the BCIS TPI Panel estimate has been applied to the previous quarter index and rounded to the nearest whole number for publication.
**The BCIS TPI Panel. BCIS has recruited a panel of practising cost consultants from firms involved in multiple tenders in each quarter to provide an early estimate of tender price movement in the latest quarter based on a panel (Delphi) survey approach. For further details see New BCIS methodology for Tender Price Index estimates.
*** Basis of 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.
The current BCIS TPI Panel members are:
A tool designed for building professionals to help prepare top level cost plans, provide early cost advice to clients and benchmark costs for both commercial and residential buildings