Cost of labour still heading north as materials price rises ease

Mace has said tender price rises will remain at 2.5% this year, unchanged from its prediction in the last quarter of 2022, before they are expected to slip back to 2% next year and the year after.

It said some areas of the industry will be busier than others this year 鈥� with housebuilding work slowing down while some infrastructure work, such as the HS2 station at Euston, has also been hit.

But it said other areas, such as warehouse and logistics, will remain busy and added: 鈥淭his will lead to considerable variability in pricing and result in tender movements being truly project specific.鈥�

euston (2)

Source: HS2 Ltd

Work on HS2鈥檚 station at Euston was stalled earlier this month

Mace鈥檚 latest quarterly market report said materials prices were slowing down, with falls in four of the last five months of 2022, but the cost of labour is still on the rise with pay packets finishing last year 6.1% up on 2021.

Mace Consult鈥檚 global head of cost and commercial management, Andy Beard, said: 鈥淭he decision to review timescales for multiple large projects highlights the fragile nature of the industry.

鈥淲hile rising interest rates will have done little to help the precarious financial position of the supply chain, material costs starting to ease is welcome news. Lower energy prices should help some product prices slip further, although it might take some time before this fully feeds through, and prices will remain much higher than they were two years ago.鈥�

Topics