Increased Pressure on Contractors as Tender Prices Reduce in Response to Covid 19

29 June, 2020

As lockdown eases, and social distancing measures reduce in some parts of the UK, the construction industry will be hoping for a return to business in the new normal.

However, Mace’s latest Market View report for Q2 2020 suggests that as the economy begins its recovery, construction tender prices will reduce by as much as 2.5% across the UK in 2021. The number of single-stage tenders is also expected to rise.

This is a blow for an industry where contractors are already being squeezed from all sides.  In our 2019 Constructing the Future report , contractors from across the UK revealed that not only were the number of tenders reducing, but that construction costs were rising at a much faster rate than tender pricing.

Mace’s report also reveals that construction output declined over 40% in April 2020, making it the sector’s worst month on record.

Mace Cost Consultancy’s managing director Steven Mason, commented: “As the construction industry continues to adapt to the full impact of Covid-19, we are faced with a period of market uncertainty and potential volatility that is unprecedented in modern times.”

This additional pressure on contractors across the UK means that there is even more need for accuracy at the tender and pre-tender stage, such as the integration of BIM and other technologies that allow better analysis of the project and result in the most accurate Bills of Quantities possible.  It is clear that the construction industry as a whole must work together in order to navigate the challenges of the coming months.