Cost inflation and price trends
Construction costs continue their upward trajectory, though at a more moderate pace than seen in previous years. Material cost increases over the past 12 months have been led by concrete (7.0 percent), followed by copper cable (5.0 percent). Notably, structural steel showed a slight increase of 1.0 percent - the first time in the last three reports that it has shown growth after consecutive periods of decrease. Meanwhile, reinforcement bar continued its downward trend with a 1.0 percent decrease, marking the third consecutive report showing declining prices for this material as detailed in Figure 9.
On average, material costs increased by 3.0 percent while labour costs grew by 4.0 percent. It is important to note that these figures do not take into account the potential impact of future tariffs which may be imposed by the US, which could significantly affect material costs and supply chains across the construction sector.
Source: Turner & Townsend survey
Trades and labour present a more uniform picture of inflation, with site foreman wages increasing by 5.0 percent and most other roles seeing 4.0 percent increases. Looking ahead, contractors anticipate continued cost growth, with copper cable expected to rise by 6.0 percent, concrete and sheet metal by 5.0 percent, and most other materials and labour categories by 4.0 percent over the next 12 months.
Source: Turner & Townsend survey
Tender price inflation projections from consultants and contractors show some variance but generally point to gradual moderation. Our projection shows a 2.0 percent for 2025, while the average contractor expectation is 3.3 percent. This divergence highlights the uncertainty in predicting market conditions, though the trend toward more sustainable inflation levels is consistent across sources.
