Introduction

Tender prices continue to ease but margins tighten

Welcome to the Q2 2024 edition of Construction Market Intelligence, the new digital publication incorporating RLB’s quarterly tender price forecast. As always, the aim of our experts is to provide the data, insights and analysis that you need to understand what is happening, and what is likely to happen, in construction around the UK.

This quarter we report that the easing of tender price uplifts is continuing, as we reported last quarter, alongside the need among contractors and subcontractors for replacement workload. Meanwhile, supply chain costs are becoming baked into the input cost environment, further tightening margins.

Concerns over geopolitical issues remain, with no resolution in sight, although marginal cost imposts on materials coming to the UK around the Cape of Good Hope are already mostly part of the new normal.

As we move toward the middle of the year, the uncertainty surrounding the timing of the next general election may begin to fade as it will become more likely to be a fourth quarter visit to the polls. From the perspective of the construction market, the timing matters, impacting projects moving toward and through tendering, and compressing policy implementation into tighter timeframes.

Economic growth is almost static and interest rates have yet to drop. Low levels of unemployment, normally a good sign of a burgeoning economy, are currently being seen as depicting a market that cannot resource itself due to skills shortages. On a positive note, inflation has fallen and continues to decline, which has been welcomed by those considering investment decisions.