Building materials 'up 5.5%'

Construction costs are continuing to rise with the cost of materials up 5.5 per cent, it has emerged.

With demand dropping, contractors are also under pressure from increased resource costs, according to the Royal Institute of Chartered Surveyors' Building Cost Information Service (BCIS).

The latest Tender Price Index from the BCIS has revealed that contractors are having to "hold prices in order to secure tenders" despite seeing the costs of materials increase 5.5 per cent and wages climb 4.4 per cent in the year to the second quarter.

Peter Rumble, BCIS information services manager, stated that with the construction industry clearly heading to a "prolonged recession" it is logical that contractors are being "cautious with their tenders".

Mr Rumble has forecast that output levels are set to decline in all sectors but contractors will increasingly have to "bear the brunt of any increases" in resource costs in order to secure new business.

This could be good news for those embarking on a self build project as contractors are likely to have to offer more competitive tenders to secure work and the Press Association has claimed that tender prices are expected to fall further this year and the next.