Tender prices increased by an estimated 0.7% between 2Q2026 and 3Q2026, according to the latest data from the Building Cost Information Service (BCIS).
The increase resulted in 3.2% annual growth in the BCIS All-in Tender Price Index (TPI). The estimate reflects the consensus view of the BCIS TPI Panel, comprising cost consultants from firms involved in multiple tenders each quarter.
Dr David Crosthwaite, chief economist at BCIS, said: “Broadly speaking, tender prices are not keeping pace with construction input costs, reflecting low levels of activity in the market.
“Conflict-related disruption and uncertainty are clearly weighing on demand, but the panel remained optimistic about some areas of the market. For example, there are opportunities in commercial refurbishment and cut-and-carve work, as well as utilities, supported by investment in water and energy infrastructure.”
More than three-quarters (77%) of the panel said contractors were eager to tender during the third quarter, up from 67% in 2Q2026. A further 15% reported finding the desired number of suitable tenderers after searching.
Panel sentiment towards project pipelines improved slightly compared with the previous quarter. 54% reported an anticipated increase in their pipeline of projects going to tender over the next year compared with the previous 12 months. This was up from 40% in 2Q2026. Almost one-third (31%) expected no change while 16% predicted a reduction.
Dr Crosthwaite added: “Cost pressures remain, however. MEP resources are being stretched by data centre construction and the New Hospital Programme, while shortages persist among green-collar workers and other specialists. The panel also reported higher prices for copper, fabricated steel, rebar and some oil-derived products.
“Escalating hostilities between the US and Iran are creating a challenging environment for contractors. For clients, however, the panel noted that now may be a favourable time to build, with tender price growth relatively stable and spare capacity in the market as weaker demand weighs on workloads.
“How long that window remains open is uncertain. Clients may wait for the Autumn Budget before making firmer commitments, which could continue to weigh on near-term demand. There is also no guarantee that contractors will be able to maintain competitive pricing if cash flow pressures intensify. Given the unpredictable geopolitical environment, conditions can change quickly, so the outlook must be taken on a day-by-day basis.”
