Tender prices slump 2.4% despite rising costs

Tender prices slumped 2.4% in the first three months of the year, amid contractors’ fears of a credit crunch backlash.

The Royal Institute of Chartered Surveyors (RICS) said the price of new construction work fell in the first quarter of 2008 despite costs rising 1.1%.

The group has predicted tender prices will rise later this year in line with a forecast slump in new work output in 2008.

The Building Cost Information Service Tender Price Index shows overall work demand is currently on track thanks to increased public sector and infrastructure work.

But this is expected to fall later in the year and remain steady until recovering in 2010.