BCIS tender price index – estimate of tender price inflation

Tender price index, estimate of tender price inflation, 1Q2026

Tender prices increased by an estimated average of 0.7% between 4Q2025 and 1Q2026, resulting in annual growth of 2.8% in the BCIS All-in Tender Price Index (TPI)⁽¹⁾.

The estimate is the consensus of the BCIS TPI Panel at the mid-point of the quarter (2), based on analysed Delphi survey results, and does not necessarily represent the views of individual participants.

Through their survey responses and in discussion, panellists pointed to various pertinent factors in the industry and wider financial climate impacting on tender pricing.

Appetite to tender 

The panel reported a strong appetite to tender among contractors in 1Q2026.

More than half of survey respondents found contractors quite eager to tender while more than one-third found the desired number of suitable tenderers after searching. 8% found contractors very eager to tender.

Panel commentary suggested overall appetite to tender has improved over the past year. This appears to reflect a combination of fewer new project opportunities, recent project completions and the need for contractors to maintain workload and cash flow.

However, contractor selectivity remains where risk share is higher. Respondents highlighted tighter programmes, limited margins and potential delays linked to Building Safety Regulator (BSR) approvals as factors influencing contractor decisions.

Project pipeline

Panel insights pointed to a robust project pipeline in 2026, though optimism was tempered by slower-than-expected growth and escalating unrest in the Middle East.

Wider commentary suggested that the pipeline should be growing at a faster rate than it is. The panel cited project conversion challenges, with projects’ viability, contractors driving tougher negotiations and the impact of geopolitical uncertainty as constraints on progress.

More than two thirds of survey respondents reported a slight increase in their anticipated pipeline over the next 12 months compared with the previous 12 months. This was up from 29% in 4Q2025.

Geopolitical risk

Looking forward, the panel said the impact of recent unrest in the Middle East would largely depend on its duration. If the situation resolves quickly, disruption could ease within six months. However, the effects of prolonged unrest are more difficult to assess and could be significant.

Disruption has reportedly not been reflected in tender prices yet, although continued uncertainty could affect market activity. In this scenario, possible consequences may include projects stalling, reduced workloads and downward pressure on tender prices.

The conflict is not expected to prompt further reductions in interest rates. The panel cautioned that a return to higher rates is possible and could compound existing project viability challenges.

Industry challenges

Materials and labour availability are reportedly good, partly reflecting the recent slowdown in construction output. However, the panel noted skills shortages in specialist trades towards the end of projects, particularly in areas such as sprinkler installation and façade works.

Stricter English language requirements for work visas were also cited as a constraint on labour supply. These requirements may make it more difficult for joint ventures and European specialist contractors to bring teams into the UK.

Elsewhere, delays in BSR gateway 2 approvals have reportedly increased upfront costs for pre-construction services agreements (PCSAs) and delayed project starts. Developers are also reassessing the viability of delayed projects, some of which may not proceed. Faster approval timelines are expected to ease these pressures.

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Panel members

The current BCIS TPI Panel members are:

• Alexander Bill, Gleeds
• Craig Short, Rohan Short
• David Hughes, Calfordseaden
• Don Patterson, Equals Consulting
• Gavin Murgatroyd, Gardiner & Theobald
• Ian Goodridge, Arcadis
• Max Wilkes, AtkinsRealis
• Nigel Hawes, exigere
• Nitesh Patel, Turner & Townsend
• Pablo Cristi Worm, AECOM
• Paul Beeston, Rider Levett Bucknall
• Paul Goldstraw, WT Partnership
• Peter Maguire, WT Partnership
• Rachel Coleman, Turner & Townsend alinea
• Richard Hill, Currie & Brown
• Robert Ray, Frankham Consultancy Group
• Samuel Hughes, Mace
• Simon Cash, Artelia UK
• Simon Rawlinson, Arcadis
• Steve Waltho, Turner & Townsend
• Stuart Wigley, Baily Garner LLP

Notes

⁽¹⁾ The BCIS TPI Panel estimate has been applied to the previous quarter index and rounded to the nearest whole number for publication.

⁽²⁾ BCIS has recruited a panel of practising cost consultants from firms involved in multiple tenders to, in each quarter, provide an early estimate of tender price movement in the latest quarter based on a panel (Delphi) survey approach. For further details see: BCIS Tender Price Index Panel.

Basis of the All-in BCIS Tender Price Index

TPI figures prior to 4th quarter 2018 are based on project indices, generally single stage, traditional procurement, average value < £5million, (minimum £100,000, no maximum).

Excludes M+E and other specialist trades, e.g. facades. BCIS has assumed this reflects market projects let on single-stage Design and Build and Specification and Drawings.

Indices are normalised for location, size and procurement. Percentage changes are mid-quarter to mid-quarter.