Consultant adds that contractors getting tougher on dealing with risk

Arcadis has said optimism about construction鈥檚 recovery is on the rise but warned any meaningful turnaround is not expected until the middle of next year.

In its latest quarterly review, the consultant says improving economic conditions, including expected further interest rate cuts, and growing pipelines of work are underpinning a gradual recovery.

It added: 鈥淸Our] report indicates a more optimistic outlook for the construction sector, with improvements in economic conditions and a stronger workload pipeline validating earlier forecasts.鈥�

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Activity in London and the South-east is on the rise, the Arcadis report said

It said tender prices across regional building, London construction and infrastructure would stay at previously predicted figures for this year.

Prices in the buildings market will increase by 3% to 4% next year and by up to 6% from 2026.

It added: 鈥淚ncreased activity is noted in London and the South-east, and we may upgrade our London region forecast if the trend continues.鈥�

Arcadis said the picture for infrastructure was mixed with demand for water and electricity work increasing but road and rail was slowing down.

And it added: 鈥淸There is] a toughening of contractors鈥� commercial approach to tenders. Discussions are increasingly focused on risk allocation and contractual terms, though pricing remains a critical negotiation point.鈥�

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