Movement in tender prices in Scotland 

BCIS set up the Scottish Tender Price Assessment Panel to help measure the trend of contractors’ pricing levels in accepted tenders in Scotland.

The panel is comprised of cost consultants from firms involved in multiple construction tenders in Scotland.

As well as reporting on quarterly and annual movement in tender prices, the panel provides commentary on conditions affecting pricing levels on construction projects in Scotland.

The BCIS Scottish Contractors Panel separately reports on quarterly movement in construction input costs based on their experiences working with subcontractors and preparing tenders.

Tender price movement in Scotland

Building tender prices in Scotland rose by an average of 0.9% in 2Q2025 compared with 1Q2025, and by 3.4% in the year from 2Q2024.

These are the same increases as were reported in 1Q2025, based on the findings of the BCIS Scottish Tender Price Assessment Panel (STPAP).

Appetite to tender

40% of panellists reported they found the desired number of suitable tenderers after searching, while another 40% observed contractors were more eager to tender in 2Q2025. 20% said they were less eager to tender.

Panellists reported that contractors are generally keen to bid for projects up to around £5 million. However, interest from tier one contractors declines for higher-value projects. Views on single-stage tendering were mixed: some contractors appear more open to it to avoid missing opportunities, while others continue to avoid it altogether.

Panellists commented that contractors generally remain risk averse and selective when deciding which projects to bid for, and that there is a preference to work with existing clients and focus on sectors where they have a proven track record.

Project pipeline

Panellists reported fairly positive project pipelines for the next 12 months. Mirroring the previous quarter, 40% said their anticipated pipeline of projects going to tender has slightly increased, a further 40% said it is unchanged, and 20% said it has reduced slightly.

While some confidence has returned to the sector, panellists said it’s not yet back to pre-pandemic levels. They reported that tender interest from contractors varies by location, sector and value, with major challenges in more remote locations and plenty of interest in the Central Belt and with fit-out projects. They said there is a sweet spot where plenty of contractors are interested; with higher value or some single stage tenders, they’re more likely to struggle to attract interest.

Panellists noted increasing unpredictability in tender returns, with some projects attracting just one or two bids, while others receive as many as eight.

Labour challenges

While panellists said the recent employers’ National Insurance Contributions increase had not produced a sudden spike in labour costs, they said it has been working its way through in tenders, alongside the effects of ongoing skills shortages and limited capacity in the supply chain.

The panel agreed that the impact of the UK government’s shifting immigration policy, and whether or not it might cause Scottish workers to relocate to England to plug gaps for higher pay, is something that will need to be monitored.

Input costs

Panellists agreed increased cladding and insulation prices reported by the BCIS Scottish Contractors Panel are coming through in tender returns. They said timber prices have plateaued with less demand in housebuilding, though this can change very quickly.

Public sector funding

Uncertainty over funding remains a key barrier to project progression. Panellists noted signs of movement in the healthcare sector, where projects paused in February for review are now starting to resume. As health boards complete strategic reviews of their estates and investment plans, further activity is expected later in the year.

Differential price movement

Most panellists agreed that there continues to be differential cost movement between M&E and general building work, for which there doesn’t appear to be an end in sight. A shortage of M&E subcontractors is a key factor; for example, while a project may attract eight main contractors, there may be only two M&E firms available to price it. The energy sector was also cited as drawing resources away from other sectors.

Among the panellists reporting differential price movement between regions, there were comments about a higher uplift in rural areas and work in Shetland was highlighted as carrying a premium, due to a lack of interest from local subcontractors with current commitments.

To keep up to date with the latest industry news and insights from BCIS register for our newsletter here.

Panel members:

• Gordon Ritchie, Gardiner & Theobald
• Iain McLean, Doig+Smith
• John McGuire, Thomas & Adamson
• Lynsay Turnbull, Thomas & Adamson
• Ken Wilkie, Arcadis
• Stuart Scott, Arcadis
• Jamie MacDonald, AECOM
• Ross Lovatt, Thomson Gray
• Ross McKenzie, AtkinsRéalis
• Simon Brooke, Currie & Brown
• Suzanne Graham, Turner & Townsend