Tender prices outstripped inflation by a factor of more than three last year because of steep jumps in steel and oil prices, according to figures released this week by the BCIS.

The rate rose by 14.3% for the year to the 4th quarter of 2004, compared with general inflation of 3.6% for the period.

The research arm of the RICS said the jump was no surprise, given that material prices rose by 7.3%. It said it expected further rises this year on account of the expected rises in workload.

BCIS鈥檚 Peter Rumble said: 鈥淲ith contractors expecting a further increase in steel price in early 2005 along with a significant increase in dement prices, these and further potential input cost increases could be putting upward pressure on prices during firm price contract periods.鈥�

Rumble said the rise was underpinned by more health and education PFI schemes reaching the construction stage, but was dependent on the timely release of government funds.

Source

QS News