{"id":102508,"date":"2021-12-06T13:39:05","date_gmt":"2021-12-06T13:39:05","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=102508"},"modified":"2022-02-06T19:49:36","modified_gmt":"2022-02-06T19:49:36","slug":"tender-price","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/energy-news\/tender-price\/102508\/","title":{"rendered":"Construction prices will continue to inflate into 2022"},"content":{"rendered":"

Arcadis<\/a> has updated its tender price forecast and predicts that inflation is set to continue into 2022, amidst the energy crisis<\/h2>\n

The updated tender price forecast for 2021 illustrates that the inflationary pressures on buildings are set to peak at between 4-6% in London and 4-5% across the rest of the country, and 5-6% in infrastructure. Accelerating prices<\/a> reflect the shift in main inflation costs <\/a>\u2013 from raw materials to energy costs.<\/p>\n

The analysis forms part of Arcadis\u2019 latest Autumn 2021 Market View \u2018Lift Off\u2019.\u00a0 The quarterly analysis of the UK construction market aims to predict a tender price forecast to inform clients about the latest in UK construction so that they can make appropriate financial decisions for projects and programmes.<\/p>\n

It was at the end of Q2 that inflationary pressures began to escalate, and they show no signs of slowing down. In fact, costs have rocketed in the second half of 2021 and this is forecast to continue.<\/p>\n

In total, business confidence is strong and the outlook on construction remains optimistic. In Q3 output reached \u00a346.2 billion and so is in keeping with trends dating back to 2016. Plus, in the first three quarters of 2021 new orders were also well ahead of pre-COVID levels.<\/p>\n

Inflation is hitting a wide range of materials<\/h3>\n

The second wave of inflation is reaching a much wider range of construction materials<\/a>. Due to the high output of energy in their manufacture, products such as bricks, glass, cement, and concrete are all particularly affected.<\/p>\n

This is predicted to have a wider impact on prices than the boom in raw materials, which affected metals and timber mostly. It is hard to say how the situation will unfold, especially when considering the different sub-sectors and regions.<\/p>\n

Certain sectors including private residential and industrial warehousing will continue to reap in the benefits \u2013 but more price sensitive markets, like affordable housing, could see a slowdown in the market.<\/p>\n

The result<\/h3>\n