Civil engineering tender prices rose in 2Q2026, BCIS panel finds

Civil engineering tender prices increased by an estimated 2% between 1Q2026 and 2Q2026, according to the latest meeting of the BCIS Civil Engineering TPI Panel.

The panel, comprised of cost consultants from firms involved in multiple civil engineering tenders in the UK, advises on the latest movement in tender prices - i.e. prices agreed between client and constructor at commit to construct - as well as providing commentary on conditions affecting pricing levels.

This insight helps to inform quarterly updates to the BCIS Civil Engineering TPI.

According to the panel, infrastructure demand remained stable during 2Q2026, although activity levels continued to vary across subsectors. Aviation and defence remained among the strongest-performing sectors, but panel members reported capacity constraints in the former and delayed funding allocations within defence.

More broadly, the panel highlighted slow progress in bringing projects to market.

Extended cost planning and value engineering exercises are delaying schemes as clients spend longer exploring opportunities to reduce costs before procurement.

Dr David Crosthwaite, chief economist at BCIS, said: ‘The key concern raised at the latest Civil Engineering TPI Panel meeting was the length of time it is taking for projects to move forward. Significant effort is reportedly devoted to reducing costs during the early stages of project development, before procurement begins. While that caution is understandable in the current economic climate, panel members noted that prolonged delays are likely to have the opposite effect, with project costs increasing the longer schemes are held back.

‘At the same time, the panel highlighted the rising cost of tendering for contractors. As a result, contractors are reportedly becoming more selective about the opportunities they pursue, often favouring routes requiring a lower investment of resources during tendering. This trend has been reinforced by performance bonds becoming both more restrictive and more expensive, further discouraging participation across a range of procurements.’

The panel also identified ongoing skills shortages as a challenge. Capacity pressures were reported among some professional roles, particularly within consultancies, as well as among specialist trades typically required during the final stages of projects. While these constraints are currently less pronounced in a softer market, panel members warned that any increase in activity could quickly expose existing capacity gaps.

Members also discussed potential changes in steel package costs. They noted that isolating a single cost driver is difficult given the range of factors affecting the market, including the ongoing impact of the war in Ukraine, proposed changes to UK tariff policies, the conflict involving Iran and the introduction of Carbon Border Adjustment Mechanisms in both the UK and EU.

Dr Crosthwaite added: 'Construction remains a challenging market, but there are encouraging signs of momentum in several infrastructure subsectors.

‘The critical issue now is ensuring that public sector clients continue to bring projects forward and maintain that momentum. We are already seeing weaker output in other sectors of the construction industry, mainly in housing. Infrastructure investment and progress remain essential to driving growth across the wider industry and supporting the resilience of its supply chains.'

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 65 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. www.bcis.co.uk