Mace has revised its tender costs for Q2 2016 downwards due to the post-Brexit economic environment.
Mace Cost Consultancy expects a modest slowdown in construction demand during the medium term due to the Brexit.
Tender prices are likely to fall as demand slackens.
Nationally, the firm predicts a 2% price increase during 2016 followed by a 1% drop in 2017 due to reduced demand. It further predicts that costs will remain flat in 2018.
London will see stable prices in 2017 due to pipeline work, although 2018 is expected to see a 1% fall.
Mace managing director Chris Goldthorpe said: “Although we have seen a handful of projects affected by the referendum result due to occupiers reviewing their risks and appraisals, the vast majority of our workload is currently unaffected and contractors and supply chain companies remain busy, particularly in London and the South East.
“Despite this, we feel that the resulting slowdown in demand will lead to tender prices softening, leading us to revise our forecasts downwards. We believe there’s a strong role for industry to promote opportunities across the country and support mobility of goods, services and labour between the regions. With support from the Government and clear local engagement targets for major projects and programmes, this could help bring communities together.”