黑洞社区

Tender prices will not return to today鈥檚 levels for another five years, according to an exclusive compilation of forecasts from a range of QSs.

The consultants say prolonged falls in tender prices will lead to further hardship for the industry, including redundancies, insolvencies and litigation.

The figures are compiled from five-year estimates by Davis Langdon, Cyril Sweett, EC Harris and Gleeds. They predict that by 2014, prices will have recovered to 1.7% above today鈥檚 level.

Paul Moore, head of cost research at EC Harris, said: 鈥淭here鈥檚 general agreement that prices will fall for the next couple of years, bottoming out in mid to late-2011 and bumping along the bottom until mid-2012.鈥�

Martin Smout, chairman and chief executive of GB 黑洞社区 Solutions, said: 鈥淚f accurate, these figures would mean significantly more insolvencies, leading to a massive decrease in the industry鈥檚 capabilities.鈥�

Sarah Davidson, head of corporate research at Gleeds, said: 鈥淚f tender prices continue falling into 2011, we are all going to be suffering for a long time.鈥�

She added that clients should avoid traditional lump-sum competitive tendering. 鈥淐lients must realise this is not the best policy. If they award long-term contracts, subcontractors鈥� costs may go up and the main contractor will have to find the money elsewhere, including through claims.鈥�

Simon Rawlinson, a partner in Davis Langdon, said prices would eventually inch up because 鈥渆ven if output growth is limited, increasing raw material prices and reduced capacity鈥� would lead to pressure on prices.