The economic shockwaves from Russia’s invasion of Ukraine have sent fuel prices soaring across the world – adding pressure to a UK construction industry already buffeted by rising input prices after years of Brexit and pandemic disruption.
Against this backdrop, our latest UK market intelligence report outlines significant upward revisions to our quarterly forecasts. Central forecasts for tender price rises in 2022 now sit at 8.5 percent for real estate and 6.0 percent for infrastructure, much higher than that of the Winter 2021/22 predictions of 4.5 and 4.0 percent for the same period. However, our analysis indicates that, beyond 2022, there may be a settling of conditions in the longer term.
In the face of uncertainty and rising prices, businesses must keep cool heads – maintaining pragmatic, flexible procurement and greater collaboration with the supply chain. This is the time to focus on getting the basics right, with clear planning that factors in time for early engagement with suppliers, better understanding and apportioning risk, and maximising value over hitting target costs.
Martin Sudweeks, UK Managing Director of Cost Management, says: “Contract scrutiny needs to be front and centre. Businesses must avoid panicked procurement in the hope of locking-in pricing, instead taking time to eliminate ambiguity that can be a bigger risk than inflation itself. This is about picking the best team and ensuring you have capable and resilient contracting partners.”
Read the full report to find out more about tender conditions in the UK.