What is the story about?
What's Happening?
Tender prices in the UK construction sector are under pressure due to a lack of new orders, according to Rider Levett Bucknall's Q3 2025 market forecast. The report indicates that regional tender prices have remained largely static, with downward adjustments in some areas. The trend is attributed to weak order volumes, increased bid competitiveness, and flat input costs. The Building Cost Information Service has also revised its national average forecast downward. The stagnant market conditions are affecting contractor margins, with public sector projects driving growth while private investment remains cautious.
Why It's Important?
The stagnation in tender prices and new orders highlights challenges in the UK construction sector, which could have broader economic implications. Contractors are facing increased competition and pressure on margins, potentially affecting project delivery and profitability. The reliance on public sector projects for growth underscores the need for private investment to stimulate the market. The situation reflects ongoing macroeconomic uncertainty, which could impact employment and investment in the construction industry.
What's Next?
The forecast for 2026 suggests tender prices will remain consistent with current levels, even with potential government-led projects entering the market. Skills shortages could intensify if workloads rise, adding further pressure to the sector. Stakeholders will be monitoring government initiatives and economic indicators to assess future market conditions and opportunities for growth.
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