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Sluggish economy puts pressure on tender prices

UK tender prices will fall nationally by 1.1% from this year to the second quarter of 2012 and will not start rising until the beginning of 2013 due to the sluggish economic recovery, a report released today said.

According to analysis in the latest Market View Report from consultant EC Harris, the slow recovery in the UK, Europe and the US will impact on construction workloads and maintain pressure on tender prices.

Following a predicted slight rise in prices of 0.5% in 2013, EC Harris said it anticipates that prices will remain very flat, with no significant rise until early 2015.

EC Harris head of cost research Paul Moore said: “The fragile UK economic recovery has created a lack of confidence which is affecting the construction industry’s workload. Where workload leads, for example in London, prices will follow eventually. However, clients buying at low tender prices now should be aware of the potential for supply chain failure as contractors seek to deliver on low tenders in the face of rising costs.”

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