Tender prices will defy downturn

One of the country's top quantity surveyors has predicted that tender prices will continue to outstrip building costs, even though the industry is facing a downturn in workload.

EC Harris has forecast that, nationally, building tender prices will rise by 4.3 per cent until the end of 1999.

The continued buoyancy in the private commercial sector in London is expected to lead to rises in tender prices in the capital of 6 per cent over the next year, slowing to 4.9 per cent over the following year.

Civil engineering tender prices are expected to rise nationally by 5 per cent throughout 1999. However, although the rate of the rise will slow throughout 1999, it should bounce back in 2000.

Richard Clare, chairman of EC Harris, commented: "The construction industry is, to date, showing a remarkable resilience, in the light of the current volatility in the UK and world economies.

"The industry is, naturally, not immune to the fears of recession, and we have seen clients in the key private commercial sector becoming more cautious and some developers delaying their commitment to capital expenditure.

"The construction market remains difficult to call with main contractors caught between tight margins and inflated sub-contract package prices.

"Increasingly the industry is also embracing longer term, less adversarial relationships such as partnering and profit sharing."