Tender prices have been tipped to outstrip inflation over the next two years as labour shortages and materials price increases start to bite.
The Building Cost Information Service's latest report predicts that tender prices will increase 4% this year and 5% in 2002. This is set against a predicted retail prices index of 2.5%. The General Business Cost Index is also outstripping the RPI.
Commenting on the BCIS figures, Barrie Tankel Partnership's Yardstick report said the main causes of the increases were labour shortages and materials price increases. Companies will be forced to pass on some costs to clients, the study said, but the competitive market will put them under increasing pressure.
Gardiner & Theobald's tender price indicator agrees that prices will continue to rise above RPI, adding that: "There are few signs that this will change in the short term."
