UK civil engineering costs to rise

UK civil engineering costs rose by 0.7% in the second quarter of 2015, remaining unchanged compared with the same period last year, according to the Royal Institution of Chartered Surveyors’ (RICS) Building Cost Information Service (BCIS).

BCIS data shows that civil engineering costs, tender prices and infrastructure in the UK will rise at a rate of around 3.5% to 5.0% each year, over the next five years. The price of materials and nationally agreed wages will also increase.

Costs are expected to rise by around 25% over the next five years.

Infrastructure is expected to be strong this year but remain static in 2016. By 2017, output is predicted to fall, with the cycle of some major projects having passed their peak. Moderate growth will return in 2018 and 2019, before rising sharply in 2020 as a result of increased investment in major roads schemes, and a build-up of the high-speed rail project.

Over the next few years, tender price rises are expected to be driven primarily by increases in input costs, rising by 4% to 5% as growth moderates and even falls in 2017, according to Peter Rumble, head of forecasting, RICS. “Over the final year of the forecast, stronger output growth in 2020, together with increasing input costs, are likely to lead to higher tender price rises in the year to second quarter 2020, with a rise of 6.2%”, he said.