{"id":517821,"date":"2025-04-02T12:45:06","date_gmt":"2025-04-02T11:45:06","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=517821"},"modified":"2025-04-02T12:13:53","modified_gmt":"2025-04-02T11:13:53","slug":"mace-surging-labour-costs-set-to-push-up-tender-prices","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/cn-intelligence\/workforce\/mace-surging-labour-costs-set-to-push-up-tender-prices-02-04-2025\/","title":{"rendered":"Mace: surging labour costs set to push up tender prices"},"content":{"rendered":"

Tender prices are set to rise on the back of mounting labour costs, according to the latest industry forecast.<\/p>\n

In its quarterly report on the UK construction market, Mace\u2019s consultancy arm said workforce shortages remained a hurdle for the industry, with labour costs rising by 1.6 per cent in the last quarter of 2024 to sit 6.5 per cent higher than a year before.<\/p>\n

Construction pay is now rising faster than in all but one other sector and is growing at its second highest rate since coming out of the pandemic.<\/p>\n

As a result, Mace<\/a> updated its national tender price forecast from 3.5 per cent to 4 per cent for 2025, while in London, the forecast rose from 3 per cent to 3.5 per cent.<\/p>\n

One positive for contractors last year was the lack of movement in material prices, which had provided welcome relief, it said.<\/p>\n

However, stabilising material prices were likely to be outweighed by rising labour and energy costs coupled with looming inflationary pressures, it warned.<\/p>\n

While interest rate cuts and the government\u2019s infrastructure and planning reforms were positive steps to stimulate growth, it said these alone would not be enough, with productivity issues and labour shortages remaining significant obstacles.<\/p>\n

Oliver North, director of cost and commercial management, Europe, at Mace Consult, said rising vacancies could be partially met with a focus on tackling productivity weaknesses.<\/p>\n

\u201cThe welcome recent government funding announcement<\/a>, incorporating \u00a3600m to train 60,000 more construction workers, will be crucial in addressing shortages and supporting the industry\u2019s growth also,\u201d he said.<\/p>\n

He warned that although growth in construction this year should \u201ccomfortably beat\u201d last year\u2019s subdued level, economic and political uncertainties remained.<\/p>\n

\u201cWhile the steps being made when it comes to planning, devolution and funding for the Building Safety Regulator will have a long-term impact, processes need to speed up to boost confidence, help secure pipelines and encourage investment,\u201d he said.<\/p>\n

The report also raised concerns over potential unease arising from the presidency of Donald Trump, including its implications for Ukraine and European security.<\/p>\n

\u201cWorryingly, the eye-catching start of Donald Trump\u2019s presidency suggests logistical challenges will be at the forefront of procurement teams\u2019 thoughts,\u201d it added.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tender prices are set to rise on the back of mounting labour costs, according to the latest industry forecast. In its quarterly report on the UK construction market, Mace\u2019s consultancy arm said workforce shortages remained a hurdle for the industry, with labour costs rising by 1.6 per cent in the last quarter of 2024 to …<\/p>\n","protected":false},"author":130832,"featured_media":517844,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[539,82213],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n