Think Timber warns that rising construction tender prices risk placing further strain on specialist manufacturers – unless housebuilders engage earlier and adopt more realistic, clearly defined specifications.
Recent market intelligence from Turner & Townsend forecasts tender price inflation of around 3.5% per year across real estate, and up to 5% in infrastructure through 2026 and 2027. While this reflects ongoing capacity and labour constraints, Think Timber says the greater risk lies in how inflation pressure is managed within the supply chain.
“Tender inflation doesn’t automatically translate into healthier supply chains,” said Gav Brown, CEO of Think Timber. “For specialist manufacturers operating on tight margins, particularly in regulated and labour-intensive areas, cost pressure is already very real, and specialist components, such as timber staircases, often feel inflation first, as they are frequently specified late in the process and procured on price alone.”
He added: “When cost risk is pushed down the chain, it doesn’t disappear. It shows up as margin erosion, reduced capacity and, over time, fewer specialist suppliers able to support volume housing.”
Gav says projects that involve manufacturers earlier, and lock down specifications at an early stage, are better placed to control cost and project risk. Unclear or outdated specifications, by contrast, introduce inefficiency, rework and uncertainty, which ultimately feeds back into tender pricing. Without better alignment between tender pricing, specification and manufacturing realities, rising tender prices risk accelerating the loss of specialist capacity at the very point the industry needs it most.
To mitigate these risks, Think Timber is urging developers, housebuilders and specifiers to engage specialist suppliers earlier in the design and procurement process.
“Early engagement isn’t just about cost control – it’s about protecting the supply chain that makes delivery possible,” Gav said. “Staircases for instance are a critical element in any home, yet they’re often treated as an afterthought. Bringing specialist manufacturers into the conversation earlier helps ensure projects remain viable, compliant and on programme.
“You can’t manage inflation at the point of tender alone. The projects that perform best are those that lock down their specifications early, work with their supply chain as partners, and focus on long-term value rather than headline price.”
