BCIS launches construction costs inflation forecasts

A new service offering forecasts on more than 150 work category indices has been launched by BCIS.

BCIS Forecasts of PAFI projects five-year input costs for indices related to building trades, civil engineering, specialist engineering and highways maintenance, all of which are updated monthly. 

Part of BCIS CapX, PAFI (price adjustment formulae indices) are unique in the industry for tracking construction resource costs at a granular level. For decades, the indices’ historic data has been used in contracts as a method of calculating the increase, or decrease, in contractors’ costs over any period, to facilitate reimbursements. 

For the first time, BCIS is now producing forecasts for more than 150 of the PAFI indices, opening up the potential for construction firms and cost professionals to benefit from a myriad of uses. 

BCIS’s Chief Data Officer, Karl Horton, said: ‘Coming through a turbulent period in the industry, the last couple of years of which have been marked by hugely volatile input costs, expensive finance, and so much uncertainty, I’m delighted we are now able to offer this forecasting service to our subscribers. 

‘Our forecast indices are for individual work categories and materials, which means subscribers can select the most appropriate indices to align with the projects they are working on, for example if they are using concrete piling or steel piling, or different kinds of cladding materials. 

‘Going down to this level means the forecasts at their fingertips are likely to be more reliable than using a general economic forecast, or even a general construction costs index, which doesn’t reflect the constituent parts of individual projects, the balance of input resources, and where particular cost pressures may arise. 

‘We know that cash flow management and the ability to budget for projects is absolutely crucial. It’s one of the aspects of working in construction that, unfortunately, has come out so clearly in the insolvencies and profit warnings we have seen recently. 

‘When deciding whether to tender for work, at what price to tender, and in managing finance to anticipate the future costs of projects, having an insight into what is forecast to happen in coming in months and years could be invaluable.’ 

The 157 forecast indices cover four specialist areas:

• Building 
• Civil Engineering and related Specialist 
• Highways Maintenance 
• Specialist Engineering