Home » Movement in tender prices in Scotland 

Movement in tender prices in Scotland 

Published: 07/12/2023

Building tender prices in Scotland rose by 1% in 4Q2023 compared with 3Q2023, and 5% in the year from 4Q2022. This is based on the findings of the recently formed BCIS Scottish Tender Price Assessment Panel (STPAP).

The more remote areas of Scotland, including the Highlands and Islands, were highlighted as having differential movement, as most respondents reported regional variations in price inflation. This was reported to be due to the cost of transportation of materials, labour accommodation, as well as ongoing high project demand.

A limited supply chain, lack of competition, and materials and labour costs were cited as contributing to differential movement in tender pricing between building and mechanical and electrical (M&E) work. Panellists noted that it was difficult to get M&E subcontractors to commit to projects and the bids were only being kept open for short periods. This was mainly due to lack of labour supply.

BCIS Chief Data Officer Karl Horton said: ‘It’s evident from the latest panel results that the risk profile of projects remains at the heart of decisions around tendering, though the actual sharing of risk and the mechanisms used is variable.

‘Compared to the third quarter, there has been very little change in contractors’ appetite to tender, with half of our panellists saying, in their experience, the desired number of suitable tenderers was found after searching.

‘While our tender price assessment panel pointed to a continued stabilising of materials costs and lead times, it was interesting to hear that an increase in decarbonisation projects is potentially leading to a slightly higher rate of inflation in key materials for that kind of work.’

Responses to the BCIS survey suggested slight tightening in panellists’ anticipated pipeline of projects going to tender within the next 12 months, with two-thirds saying their pipeline has reduced slightly.

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Notes:

The BCIS Scottish Tender Price Assessment Panel (STPAP) has been set up to help measure the trend of contractors’ pricing levels in accepted tenders in Scotland.

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

 

Panel Members

Alan Wilson, Doig+Smith

Gordon Ritchie, Gardiner & Theobald

John McGuire, Thomas & Adamson

Ken Wilkie, Arcadis

Robert Rankin, AECOM

Ross Lovatt, Thomson Gray

Ross McKenzie, AtkinsRéalis

Suzanne Graham, Turner & Townsend

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