Large scale infrastructure work suffering from steep rise in costs

BCIS Civil Engineering Market report Q2 2008 – Forecast to Q4 2010

PR058 

Large scale public sector projects such as Crossrail and those linked to the 2012 Olympic Games, including the East London Line and Thameslink, are in danger of dipping further into the public purse due to significant increases in costs, according to the Civil Engineering Market report from RICS’ Building Cost Information Service (BCIS).

Raw materials and labour costs have risen by 12.2 percent over the past year and, with costs forecast to rise by a further 12 percent over the next two years, public sector project contingency plans will come under increasing pressure to stay out of the red.

With infrastructure output rising by eight percent and new orders growing at a rate of 26 percent in Q1 2008, this sector is expected to be one of the few growth areas in UK construction over the next few years, offering some firms an antidote to the current downturn in the market. However, the rises in the costs of cement, steel piling and fuel are having a dramatic impact on civil engineering construction costs.

Overall infrastructure output is predicted to rise by nine percent in 2008 and seven percent in 2009, while BCIS forecasts costs to continue to rise at a rate of 6.5 percent in 2008 and 6 percent in 2009.

Joe Martin, Executive Director of BCIS comments:

“With large projects in rail, roads, electricity, water and sewerage all scheduled over the next two years, the civil engineering sector seems well placed to ride out the current economic downturn. However, the industry is facing the possibility of a serious threat caused by a combination of rising costs and the economic downturn, that could result in delays and, at worst, cancellation of some of these schemes.”

Notes for editors:

The BCIS Civil Engineering Market Report has been published in conjunction with the BCIS Civil Engineering Price Book 2008.  The full report is available for download from http://www.bcis.co.uk/

The BCIS Civil Engineering Price Book 2008 aims to help estimators and quantity surveyors save time and money by making the estimating process faster with better accuracy. The book presents a unique audit trail that enables the user to see the complete build up of every rate making it invaluable when preparing early cost estimates and developing cost plans.

The price book covers the 26 classes in CESMM3. Class A contains the general items which would be included in a typical build up of costs. Classes B-Z provide the reader with a complete audit trail for pricing and set out labour material and plant costs.

The BCIS Civil Engineering Price Book is priced £185 and can be ordered online at www.bcis.co.uk or by calling T +44 (0)870 333 1600 (select option 2 for BCIS sales and quote item code 17379). Publication date: May 2008 ISBN: 978 1 90482 978 2

About RICS
RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 86,000 chartered members (FRICS and MRICS) and 55,000 members in other categories of membership (TechRICS, trainees and students) globally. It represents, regulates and promotes the work of these property professionals throughout 146 countries. RICS is governed by a Royal Charter approved by Parliament which requires it to act in the public interest. It is also a professional regulatory body approved by Government (HM Treasury).

About BCIS

BCIS (Building Cost Information Service) publishes information on the capital cost of new and refurbished work collected from Chartered Quantity Surveyors and others working in the building industry.  BCIS is a trading name of RICS and was established in 1962 to exchange detailed building price information.

Claire Barratt
Press Officer
RICS Corporate Communications
T: +44 (0)20 7334 3736
F: +44 (0)20 7334 3722
E: CBarratt@rics.org
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