Dr David Crosthwaite
Civil engineering costs are set to rise by 14% over the next five years to 4Q2030, while tender prices for civil engineering work are expected to increase by 22% over the same period, according to the latest forecast from the Building Cost Information Service (BCIS).
Dr David Crosthwaite, chief economist at BCIS, said: “Indicators at the start of the quarter pointed to strengthening momentum in the infrastructure sector, supported by the updated NISTA pipeline, which includes £718 billion of projected investment.
“That outlook has since become more uncertain following developments in the Middle East. Increased volatility in energy and commodity prices could sustain inflationary pressures and slow the pace of infrastructure growth, although the full impact remains unclear at this stage.”
New infrastructure work output is forecast to grow by 15% between 2025 and 2030.
When the BCIS Civil Engineering Tender Price Index Panel met in February, members reported strong activity in the electricity sub-sector, as well as work in Oxford and Cambridge, and early planning stages for Northern Powerhouse Rail, contributing to activity in the rail sub-sector.
Dr Crosthwaite added: “Following a sharp contraction of 8.2% in 2024, infrastructure output returned to modest growth in 2025, increasing by 1.9%. Despite emerging risks, the sector enters this latest period of upheaval to global markets on a more resilient basis than in previous crises.
“Supply chain disruptions during the pandemic and the Russia-Ukraine war exposed structural weaknesses, prompting firms to strengthen operational resilience. The current geopolitical shock will therefore test the extent to which these lessons have been embedded and whether recent adjustments are sufficient to mitigate further disruption.
“Pressure on skilled labour persists, with ongoing concerns around both availability and cost. With infrastructure output expected to grow and labour supply remaining constrained, BCIS forecasts continued increases in labour costs.”
For more information about BCIS, please visit: www.bcis.co.uk
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