2024-08-01-莱坊-Tender_Price_Index_Q2_2024_1页_373kb

Tender Price Index Summary: Q2 2024 Forecast

Core Content

The Tender Price Index (TPI) report outlines the forecast for tender price inflation in the UK construction sector for 2024 and beyond, highlighting the impact of economic and political factors on the industry. It also provides an overview of the current state of the construction market, including key indices and material cost trends.

Main Points

• New Labour Government Initiative: The Labour government plans to establish the National Infrastructure and Service Transformation Authority (NISTA) to streamline planning and reduce construction costs. Recruitment challenges are expected to play a key role in improving the planning process for both infrastructure and commercial projects.

• Project Starts Forecast: Glenigan forecasts a 7% increase in project starts in 2025, driven by an improved economic environment, reduced borrowing costs, and political certainty boosting investor confidence.

• Private Housing Sector Growth: An uptick in the private housing sector is anticipated in the second half of 2024, partly due to Labour's commitment to building 1.5 million new properties during their term.

• Construction PMI and Output:

  • The S&P Global UK Construction Purchasing Managers' Index (PMI) rose to 52.2 in June 2024, indicating expansionary growth.
  • The index was slightly down from the 54.7 in May, which was the highest optimism level in two years.
  • Construction output grew by 1.9% in May 2024, according to the Office for National Statistics (ONS).

• Tender Price Inflation Forecast:

  • The annual tender price inflation for London is forecasted to be 2.1% in 2024, with a 3.8% increase expected by 2027.
  • For the UK overall, the forecast is 2.0% in 2024, rising to 3.4% by 2027.
  • These projections are influenced by skilled worker shortages, which are expected to drive longer-term wage inflation.

Key Material Cost Trends

Material cost movements for the period June 2023 to June 2024 are as follows:

• Brent Crude Oil Prices are reported at £84.86, showing no significant change.
• Producer Prices (Input Prices) decreased by -0.1%.
• CPI Inflation is at 2.0%, and GDP growth is 1.5%.
• Interest Rates Policy are at 5.25%, and the Unemployment Rate is 4.4%.
• Consumer Confidence Index is at -14.0, indicating a decline in consumer sentiment.

Conclusion

The UK construction sector is showing signs of stabilization and modest growth, with the PMI indicating expansionary conditions. While the short-term tender price inflation is expected to remain relatively low in 2024, the long-term outlook suggests a gradual increase due to skilled labor shortages and rising construction activity. The Labour government's infrastructure plans are anticipated to contribute to this growth, alongside improved economic conditions and investor confidence. Material costs are mixed, with some materials experiencing significant declines and others showing moderate increases, reflecting the complex dynamics of the construction supply chain.