After a 4.1% increase in UK construction costs in 2023, there will not be much of a slow-down in price rises this year, according to quantity surveyors Currie & Brown.
Currie & Brown predicts that construction costs in the UK will go up by between 3% and 3.8% this year. This is enough to impede the delivery of projects or lead to substantial rescoping, the firm says.
The causes of construction inflation have been well rehearsed – geopolitical turmoil, including conflicts in Ukraine and the Middle East, coupled with global skills and materials shortages. However, there are also domestically generated drivers of construction inflation, including planning bottlenecks and increasingly burdensome regulation, be it new building standards or biodiversity net gain rules.
Currie & Brown chief operating officer Nick Gray said: “2024 will bring fresh challenges for the construction industry across global regions. In the UK, economic growth is likely to remain flat and the construction industry will have to contend with a continuing lack of skilled labour, expensive materials, sustainability compliance and sluggish productivity. But greater collaboration between the industry and clients – to develop new ways of working and to optimise the benefits of technology – will help to mitigate the impact of cost increases. Crucially, this is what the industry will need to do to ensure key projects can still be delivered on track and within budget.”
However, the UK is not alone in experiencing spiralling construction costs and in fact will be a more stable environment than the rest of Europe or the USA this year, Currie & Brown reckons. It is predicting cost increases of between 4% and 6% across mainland Europe for 2024 and 3-6% for the USA.
Got a story? Email news@theconstructionindex.co.uk
