New data from the Royal Institution of Chartered Surveyors (RICS) show that civil engineering costs have fallen but are forecasted to rise by 20% over the next five years, reports The Construction Index (16 July 2015)
The latest report of the RICS Building Cost Information Service (BCIS) on the civil engineering sector finds that:
- Civil engineering costs fell by 1.4% in the first quarter of 2015 compared with the previous quarter, and by the same amount compared with a year earlier
- Costs – along with tender prices and new infrastructure output as a whole – will rise over the coming five-year period. It estimated that costs will rise by between 3.0% and 4.5% a year, with both the price of materials and nationally agreed wage awards increasing.
- Roads and electricity are the sub-sectors which are contributing most to the growth.
- Tender prices are expected to rise by 4.3% between the first quarter of 2015 and the first quarter of 2016. The following year, another rise of 4.8% is predicted.
- New infrastructure output is expected to be at a historically high level (when compared with pre-2010) despite only rising, on average, by 1% per annum between 2015 and 2019. Amid this pattern, strong growth of 4.1% is predicted over the coming year, before the spike slows significantly in 2016 and a fall in output in 2017.
- Price rises are expected to outstrip costs throughout the forecast period, with costs rising by around 20% over the next five years, and tender prices rising by around 26%.
Commenting on these forecasts, Enfield-based construction equipment hire company, Mr Plant Hire MD, Dave Elsdon said: “Companies, like us. serving the civil engineering sector amongst others, will have to make sure we adapt to changing needs and demands over the next few years so these forecasts are invaluable.”