Building tender prices in Scotland have risen by 5 per cent in the past year, according to the Building Cost Information Service (BCIS).
The newly formed BCIS Scottish Tender Price Assessment Panel also said tender prices in the country rose by 1.0% on average in the third quarter of 2023, with a range of 0.5% to 1.5%.
The 5% annual increase was based on a range of 3.0% to 8.5%.
The panel said overheads and profits averaged 7% of contract sums in the third quarter of 2023.
All panelists noted a “differential movement” between tender prices for construction and mechanical and electrical (M&E) works in the third quarter of 2023, due to a shortage of M&E bidders.
Some projects relied on M&E subcontractors being brought up from England, BCIS explained, and many bidders expected a “tight time frame”.
Along with higher wage demands due to skill shortages, there had been price increases for certain materials used in M&E work. However, the availability of materials in general “it was said that he had improved”.
Overall, the panel noted a “slight reduction” in the expected portfolio of projects to be tendered over the next 12 months.
The panelists said project delivery over the next one to two years, particularly in the public sector, could be affected if clients review “cost viability and availability of finance”.
BCIS Chief Data Officer Karl Horton said: “Following requests from subscribers to establish a Scottish panel, I am delighted to have the first set of results, which will help us understand the economic factors currently affecting tender prices in Scotland. .
“While there are issues across the UK, and in some cases globally, with the supply of materials, energy prices and changing legislation and regulations around safety and decarbonisation of the built environment, there are also there are factors that are particularly relevant to projects going out to tender in Scotland”.
