BCIS industry panel reports tender prices up in Scotland

Building tender prices in Scotland rose by 0.6% in 4Q2024 compared with 3Q 2024, according to a panel of cost consultants involved in multiple construction tenders.

The Scottish Tender Price Assessment Panel, which was established by the Building Cost Information Service (BCIS) to help measure the trend of contractors’ pricing levels in accepted tenders in Scotland, reported an annual increase of 3.3%.

BCIS chief economist Dr David Crosthwaite said: “Our panellists suggested a slightly more positive outlook for the next 12 months than was reported in 3Q2024, with 29% saying their anticipated pipeline of projects going to tender has slightly increased, while 43% said it is unchanged.

“Many decisions in the sector are dependent on the content of the Scottish Budget and how well it is received.”

Most panellists reported that either the desired number of suitable tenderers were found after searching or contractors were more eager to tender in 4Q2024.

Dr Crosthwaite said: “While there is appetite to tender on smaller projects, our panel suggested that bigger contractors are in a position to pick and choose what work they want to do, so the procurement route is a key consideration in what they take on. They have observed a shift, last seen pre-Covid, of smaller contractors actively enquiring about work.” 

Supply chain capacity and engagement were highlighted among logistics challenges by panel members, as well as planning issues.

They reported that lots of projects were stuck at the moment, including student accommodation, which, with residential, is one of the biggest private sectors in the central belt. 

Most panellists are experiencing differential movement between M&E and building work, with the suggestion that it’s more volatile because of labour shortages and because there is lower capacity among contractors for larger schemes.

Dr Crosthwaite said: “Panellists reported capacity and resource issues, though there was an element of component cost increases too. Panel members suggested it has become a vicious circle with main contractors trusting only those M&E sub-contractors with a track record of delivery, which pushes up costs because there are so few.’

For more information about BCIS, please visit: www.bcis.co.uk. 

Ends

Editors notes

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.