RLB鈥檚 latest Construction Market Intelligence report shows only modest revisions to its tender price forecasts from three months ago.
RLB鈥檚 forecast for construction inflation in the final quarter of 2025 has gone up from 3.03% to 3.17%, while the forecast for 2026 has gone down from 3.41% to 3.27%.
Although there has been a modest uplift in 2025 in new work undertaken, particularly in Q2 and Q3 compared to 2024, up 3% in volume, total work figures year-on-year still only sit at 1.5% volume. Latest ONS data show that growth in new orders has been generated from private industrial work and, to a lesser extent, private commercial projects, but it has been infrastructure that has really driven the new volumes. The new private housing, which normally accounts for 20-25% also showed a 12% downturn for the year.
Roger Hogg, RLB鈥檚 research and development manager, said: 鈥淭he industry will respond to the government鈥檚 鈥楪et Britain Building鈥� challenge and given many projects have been placed in a holding pattern waiting for the budget, it is expected more schemes may now come to the market. But it will undoubtedly take effort for clients to navigate the economic headwinds that persist and as a result we forecast project pipelines to remain constrained. We are also in a market where tender prices are being driven by input costs, rather than pipeline and with our tender price forecasts being relatively stable, we expect continued compressed contractor margins for the foreseeable future.
鈥淧olicy interventions, including unlocking wider use of public-private partnerships (PPPs) and investment for devolved regions, are needed for growth to be realised.鈥�
The chart above shows an average of RLB's regional tender price forecasts for the respective years, weighted by regional new orders volumes of workload for the year to September 2025 (ONS).聽
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