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Construction Costs Outstrip Inflation

LONDON-Construction costs in the UK are soaring ahead of inflation, according to the latest RICS tender price index compiled by the Building Cost Information Service.

By Graham Parker | Updated on June 27, 2001

LONDON-Construction costs in the UK are soaring ahead of inflation, according to the latest RICS tender price index compiled by the Building Cost Information Service. In the year to 31 March 2001, tender prices rose by 7.0% compared with a general inflation rate of 2.2%. Materials costs rose 1.8% in the past year while construction wage rates rose 5.9%.

However, there are signs that the pressure may be easing. There was a considerable fall in orders in the second half of 1999, which is now translating into a slowdown in site activity. Next year, new work is likely to recover and total construction output is expected to rise in 2001 and 2002.

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