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Published: 23/09/2026
Civil engineering tender prices rise as cost pressures and uncertainty hold
Civil engineering tender prices increased by an estimated 1% between 2Q2026 and 3Q2026, according to the latest meeting of the BCIS Civil Engineering TPI Panel(1).
The latest movement arrives amid continued uncertainty in the UK infrastructure market and concentrated cost pressures.
The panel reported strong activity in water and sewerage and electricity, with energy investment supported by decarbonisation and changing demand, helping to offset reduced spending on roads and rail.
However, the panel cautioned that changing government priorities could see public funding increasingly directed towards areas such as defence, affecting infrastructure pipelines elsewhere.
Geopolitical tensions in the Middle East and changes to domestic trade policy have also driven sharp increases in some input costs, including steel.
Dr David Crosthwaite, chief economist at BCIS, said: ‘Cautious optimism in the infrastructure market is being tempered by current realities, including geopolitical uncertainty, materials price pressures and viability concerns.
‘The panel highlighted continued constraints on infrastructure delivery in the UK, particularly compared with more favourable conditions in some European markets. There is concern that greater budget certainty and lower-risk opportunities elsewhere could draw suppliers and investors into other sectors, or away from the UK all together.
‘This was linked to wider concerns around reduced labour mobility and specialist capacity constraints, which can be compounded when major infrastructure projects are located in remote areas or regions without established supply chains.’
Appetite to tender among infrastructure contractors is reportedly stable. 60% of panel respondents said they were able to secure the desired number of suitable tenderers in 3Q2026. The remaining 40% described contractors as eager to tender.
‘There appears to be greater transparency between clients and suppliers in the infrastructure market and, while new work is constrained, the panel remained encouraged by the substantial infrastructure investment the government has committed to,’ Dr Crosthwaite added. ‘Supply chains are becoming more open about materials risk, supported by earlier planning and wider use of price adjustment mechanisms.
‘The Autumn Budget will be an important marker for the sector. It provides an opportunity for the government to reaffirm funding arrangements and give greater certainty over the infrastructure pipeline in a difficult economic climate. That clarity will be important for resource planning and, ultimately, supporting delivery.’
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(1) The panel, comprised of cost consultants from firms involved in multiple civil engineering tenders in the UK, advises on the latest movement in tender prices, i.e. prices agreed between client and constructor at commit to construct, as well as providing commentary on conditions affecting pricing levels. This insight helps to inform quarterly updates to the BCIS Civil Engineering Tender Price Index.
