Tender price inflation to hit 4.8% in 2008

Tender price inflation is set to hit 4.8% nationwide this year, with quotes in London racing ahead by 6.5%.

Experts at EC Harris believe many contractors still have full orderbooks for the coming year despite fears of a slow-down in many sectors.

Paul Moore, head of cost research, said: "US banking issues and the 'credit crunch' means that although base rates were cut in December, the cost and availability of funding to financial institutions has become more constricted. As a result, more speculative developments are being re-assessed.

"A good number of major schemes have, however, already secured funding, and with many contractors having full orderbooks for the next two to three years, tenders are set to plough ahead."

But the survey warned of troubled times ahead following a dramatic fall in construction new orders, which dropped 13% in the 3rd quarter of 2007.