BCIS reveals updated five-year infrastructure forecast

Civil engineering costs are set to rise by 16% over the next five years to 2Q2030, while tender prices for civil engineering work are expected to increase by 24% 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, with increases to National Insurance Contributions and the National Living Wage in the second quarter of this year impacting wage bills. Materials cost growth, conversely, is set to remain relatively flat this year.”

Despite a raft of announcements from the government over the summer and publication of both its 10-year strategy and infrastructure pipeline, the positive sentiment is yet to be translated into significantly increased activity levels.

After new work infrastructure output decreased by 9.2% in 2024, BCIS is forecasting growth of 2.5% in 2025, and for an 18% increase overall between 2025 and 2030.

Dr Crosthwaite said: “Infrastructure spending has traditionally acted as a counter-cyclical support for construction, keeping work going when private investment falls. But with government finances squeezed by higher borrowing costs and weaker tax receipts, we’re now seeing the risk of delays, cutbacks or cancellations to planned projects. 

“Private investors are also adopting a ‘wait and see’ approach, holding back decisions in the hope that successive announcements will provide more clarity and that financial conditions become more favourable.

“This fiscal ambiguity is stalling pipelines and delaying tendering, even where demand exists, leaving policymakers with the challenge of maintaining discipline while keeping a steady flow of projects to stimulate growth.”

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.