Tender prices increased by an estimated average of 0.7% between 2Q2025 and 3Q2025, according to the latest data from the Building Cost Information Service (BCIS).
The increase resulted in 2.5% annual growth in the BCIS All-in Tender Price Index (TPI).
BCIS chief economist, Dr David Crosthwaite, said: “The overall sentiment of the panel was slightly more positive in comparison with the previous quarter, with more optimism reflected in an increased pipeline for the next 12 months.”
With a more positive outlook than in the previous quarter, more than half of panellists (54%) said their pipeline of projects going to tender over the next year had increased slightly in 3Q2025, with a further 8% reporting a significant increase. Just under one-quarter (23%) said their pipeline was unchanged, while 15% reported a slight reduction.
Contractor appetite to tender has eased slightly, with 54% of panellists reporting that contractors were ‘quite eager’ to tender, down from 64% in 2Q2025.
Almost one-third (31%) said contractors were less eager, while 15% found their desired number of tenderers after searching. None reported contractors as either unwilling to tender or very eager.
Dr Crosthwaite added: “Our panellists highlighted rising staff costs and shortages of appropriately skilled workers. Client caution remains evident in the large commercial sector, where funding is often committed stage by stage, creating uncertainty. The Building Safety Act has shifted risk milestones to Gateway 2, increasing ‘at risk’ funding.”
Key challenges cited by panellists include elevated construction costs, regulation and planning processes, grid connection and compliance with new requirements such as biodiversity net gain and net zero standards.
Dr Crosthwaite said: “While challenges remain, the panel’s responses this quarter suggest the market is beginning to stabilise. With a modest rise in tender prices and a stronger pipeline of projects, there are signs of cautious optimism, but delivery will depend on how the sector manages cost pressures, regulation and skills over the coming months.”
