Movement in tender prices in Scotland 

BCIS set up the Scottish Tender Price Assessment Panel to help measure the trend of contractors’ pricing levels in accepted tenders in Scotland.

The panel is comprised of cost consultants from firms involved in multiple construction tenders in Scotland. 

As well as reporting on quarterly and annual movement in tender prices, the panel provides commentary on conditions affecting pricing levels on construction projects in Scotland.

Tender price increases slow

Building tender prices in Scotland rose by 0.6% in 2Q2024 compared with 1Q2024, and 3.5% in the year from 2Q2023. This compares with increases of 1% and 4% reported in 1Q2024 and is based on the findings of the BCIS Scottish Tender Price Assessment Panel (STPAP).

The panel reported increased eagerness to tender compared with the previous quarter. When asked how easy it is to get contractors to tender, 43% of respondents said the desired number of suitable tenderers were found after searching. The panel suggested contractors remain risk adverse and, while on larger projects contractors are selective and in a position to pick and choose, smaller and single stage projects see more competition.

Considering future work, there was a slowdown reported across all sectors, with some projects paused due to planning and some because of funding issues. The majority of respondents (71%) said their pipeline of projects going to tender within the next 12 months had reduced slightly, while 29% said it was unchanged. 

Panellists said interest rates continue to affect the private sector and many projects are on hold in the public sector.

Supply chain capacity was cited among the key logistics challenges facing respondents, including subcontractor insolvency.

The majority of respondents said they are experiencing faster price increases in mechanical and electrical (M&E) work compared with building work, with reference to labour shortages and availability of plant. Panellists reported M&E to be an extremely challenging market and that large M&E contractors have full order books and can charge a premium.

While most respondents said they hadn’t experienced differential movement between regions in Scotland, among those that had, the more remote regions and islands were said to be experiencing higher resource costs due to delivery and labour issues.

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Panel members:

• Alan Wilson, Doig+Smith
• Gordon Ritchie, Gardiner & Theobald
• John McGuire, Thomas & Adamson
• Ken Wilkie, Arcadis
• Lynsay Turnbull, Thomas & Adamson
• Robert Rankin, AECOM
• Ross Lovatt, Thomson Gray
• Ross McKenzie, AtkinsRéalis
• Simon Brooke, Currie & Brown
• Suzanne Graham, Turner & Townsend