BCIS reveals five-year infrastructure forecast

Civil engineering costs are forecast to rise by 16% over the next five years to 3Q2029, while civil engineering tender prices are predicted to increase by 23% over the same period, according to the latest forecast from the Building Cost Information Service (BCIS).

Dr David Crosthwaite, chief economist at BCIS, said: “Growth in civil engineering costs is primarily driven by labour costs, rather than materials cost inflation, and this trend is expected to continue for the next two years.  

“Increases to employer National Insurance contributions and the National Living Wage are expected to significantly impact labour costs going forward, with the BCIS Civil Engineering Labour Cost Index forecast to increase by 2.1% in April compared with March.”

New work infrastructure output is expected to have declined by 8.9% in 2024 but is set to return to growth from this year. Output in this sector is forecast to rise by 18% over the next five years, driven by strong growth in the electricity sub-sector. 

Dr Crosthwaite added: “Infrastructure output is set to be maintained at a relatively high level as work is buoyed by the energy sector and continuing work on mega projects such as HS2 and Hinkley Point C, along with offshore wind projects in the electricity sub-sector. In addition, the commitment to build the HS2 link between Old Oak Common and Euston is likely to boost output when construction starts this year. 

“However, we hoped that we would have a clearer picture of the infrastructure pipeline by spring, but the delay of the second phase of the government’s spending review to June means an even longer wait for the commitment and clarity this sector so badly needs.”

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

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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.