BCIS reveals five-year infrastructure forecast
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Civil engineering costs are forecast to rise by 16% over the next five years to 1Q2030, with growth in labour costs expected to be the main driver over the next two years, according to the latest forecast from the Building Cost Information Service (BCIS).
Dr David Crosthwaite, chief economist at BCIS, said: “The Spending Review delivered a welcome boost for the construction sector, setting out what appears to be a substantial long-term commitment to capital investment in infrastructure.
“Funding is earmarked, among other sectors, for transport and energy generation, with hopes that government action can unlock the necessary private sector investment. But persistent labour shortages and market uncertainty continue to cloud delivery prospects, raising questions over whether new projects can be completed on time, on budget, or at all.”
Civil engineering tender prices are predicted to increase by 24% over the next five-years, with the BCIS Civil Engineering TPI panel agreeing a 1% quarterly uplift in 2Q2025. Panellists noted that civil engineering prices are currently rising more sharply than in general building, driven by pent-up demand and increasing selectivity among contractors.
Dr Crosthwaite said: “Market activity remains uneven across sub-sectors. Aviation and energy are particularly active, while the rail market is beginning to cool. Investment in roads and water, meanwhile, has yet to gather momentum.
“Although the Spending Review signalled strong long-term infrastructure commitments, the sector remains in a holding pattern as the market awaits further detail, particularly the forthcoming Infrastructure Pipeline update. Panellists expect a gradual rise in tendering activity during the second half of 2025, with more momentum likely once greater clarity emerges.”
New work infrastructure output declined by 9.3% in 2024 but is set to grow by 2.6% in 2025. Output in the sector is forecast to rise by 18% over the next five years.
Dr Crosthwaite added: “With much of the investment horizon stretching over a decade, the sector has time to mobilise. Yet, based on the current picture, it’s clear the industry will struggle to meet rising demand unless there is a significant shift in supply-side conditions. The central question remains: does the sector have the capacity to deliver?”
For more information about BCIS, please visit www.bcis.co.uk.
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Editors notes
About BCIS:
The Building Cost Information Service (BCIS) is the leading independent provider of construction data to the built environment and insurance sectors. For some 60 years, BCIS has been collecting, collating, analysing, modelling and interpreting cost information to support built environment professionals, helping them provide cost advice, to have confidence in commercial decision-making and to mitigate risk. BCIS was recognised at the Engineering Matters Awards 2024 with The Net Zero Champion Gold Award for its leading role in the development of the Built Environment Carbon Database.
About BCIS construction forecasts
BCIS produces five-year construction industry forecasts, covering projected input costs, tender prices and output, and examining the latest construction market trends.
The quarterly BCIS infrastructure briefing is a civil engineering market report and presents our view of water and sewerage, electricity, roads, railways, harbours and flood defences, gas, air and communications, and infrastructure repair and maintenance output against a backdrop of civil engineering costs, including labour and materials, and the wider economic background.
