With inflation persisting in the UK economy, Mace has increased its 2023 tender price forecast from 2.5% to 3.0% in London and 3.5% elsewhere.
Its forecasts for the following two years have also been raised.
Andy Beard, global head of cost and commercial management at Mace, said: “Despite the news about inflation, we are in a much more hopeful position than we were a quarter ago. The economy has held up better than seemed likely at the start of the year, and prices have reacted accordingly.
“Notably, pay in construction is currently going from strength to strength, leaving us with little option but to increase tender prices for this year.
“Recent suggestions that interest rates could rise as high as 5.5% need careful watching. With the economy still incredibly fragile, such a shift could trigger a recession.”
However, house-builder Berkeley Group today reported: “Build cost inflation has peaked and is beginning to moderate, despite certain materials and trades remaining under pressure, particularly where energy costs are a high component of the input cost.”
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