Tender prices outstripped inflation by a factor of more than three last year because of steep jumps in steel and oil prices, according to figures released this week by the BCIS.

The rate rose by 14.3% for the year to the 4th quarter of 2004, compared with general inflation of 3.6% for the period.

The research arm of the RICS said the jump was no surprise, given that material prices rose by 7.3%. It said it expected further rises this year on account of the expected rises in workload.

BCIS’s Peter Rumble said: “With contractors expecting a further increase in steel price in early 2005 along with a significant increase in dement prices, these and further potential input cost increases could be putting upward pressure on prices during firm price contract periods.”

Rumble said the rise was underpinned by more health and education PFI schemes reaching the construction stage, but was dependent on the timely release of government funds.

Source

QS News