The BCIS All-in Tender Price Index (TPI) for 3rd quarter 2017 has been revised downwards to 313 based on an improved sample. The figure for the 4th quarter is 322. The annual change for 2017 (4Q16–4Q17) now stands at 13.4%.

Glass Canopy

BCIS has seen a significant rise in the price levels in the projects reported in 2017.

Over recent years a seasonal effect has been observed, with the TPI falling in the 3rd quarter. In six of the seven years 2010 to 2016, the index fell on average five points (2%) in the 3rd quarter.

With output expected to fall in 2018 BCIS is still forecasting a fall in the TPI of just under 2% in 2018 (4Q17–4Q18).

The General Building Cost Index for 4th quarter 2017 remains unchanged at 342 and shows costs rising by 0.9% compared with the previous quarter, and by 4.0% compared with a year earlier.

According to the Office for National Statistics (ONS), the total volume of construction orders in 4th quarter 2017 fell by 25% compared with the 3rd quarter 2017, and by 1% compared with a year earlier. The very large quarterly fall is principally due to significant growth of 38% in the previous quarter, with the award of several high-value contracts let relating to High Speed 2 (HS2).

The BCIS new work output forecast for the central scenario remains unchanged from that given in the March 2018 BCIS Quarterly Briefing (QB).

Table 1. BCIS New work output assumptions – central scenario

Year on year Forecast March 2018 Forecast April 2018
2018 -0.30% -0.30%
2019 1.60% 1.60%
2020 3.70% 3.70%
2021 4.90% 4.90%
2022 4.50% 4.50%
Source: BCIS

The forecast of building costs in the central scenario remains fairly similar in percentage terms to that published in March 2018.

Table 2. BCIS Forecast of building costs – central scenario

Year on year (4Q-4Q) Forecast March 2018 Forecast April 2018
4Q17 to 4Q18 2.90% 2.90%
4Q18 to 4Q19 3.10% 2.80%
4Q19 to 4Q20 3.30% 3.30%
4Q20 to 4Q21 4.50% 4.80%
4Q21 to 4Q22 4.30% 4.10%
Source: BCIS

Based on an improved sample, the forecast of tender prices in the central scenario is not dissimilar in percentage terms to that published in March 2018.

Table 3. BCIS Forecast of tender prices – central scenario

Year on year (4Q-4Q) Forecast March 2018 Forecast April 2018
4Q17 to 4Q18 -1.60% -1.60%
4Q18 to 4Q19 3.80% 3.80%
4Q19 to 4Q20 4.30% 4.30%
4Q20 to 4Q21 5.50% 5.50%
4Q21 to 4Q22 5.50% 5.50%
Source: BCIS

The upside and downside scenarios remain similar to those published in the March 2018 edition of the BCIS QB in percentage terms. These will be examined in more detail in the next edition of the BCIS QB. Furthermore, the effect of the 'transitional' period ending in 4th quarter 2020 instead of 1st quarter 2021 will be analysed in the next edition of the BCIS QB.

The BCIS Quarterly Briefing is published in the BCIS Online service in March, June, September and December.

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