RLB Wales revises tender price forecast to 3.00% as industry awaits June’s Spending Review for clarity
The Welsh construction sector continues to navigate a path of cautious but optimistic growth, according to the latest construction market intelligence from Welsh independent construction and property management consultant, Rider Levett Bucknall UK (RLB UK). Its revised Q2 tender price forecast of 3.00% reflects a circumspect, but steady outlook.
Growth is being driven by housing and maintenance activities, while facing challenges in infrastructure investment and labour availability. Private housing is forecast to grow at an annual rate of 3.4%, and housing repair and maintenance accounting for 23% of total output. The completion of significant infrastructure projects like the £ 590 million A465 Heads of the Valley Road upgrade is anticipated to impact future infrastructure projects. However, the Welsh construction market is in need of skilled workers, with an estimated 11,500 needed according to the CITB.
Global Pressures, Local Consequences
Macro-economic events, including the US imposition and relaxation of tariffs, have dampened investment confidence, with knock-on effects in UK construction. However, with markets looking like being well on the way back to the highs of the turn of the year and expanding data centre growth, there is cautious optimism in the sector ahead of the Spending Review on 11 June.
While the recently signed UK trade deal has eased some international trade pressures, its impact on construction is felt to be limited. Industry stakeholders are now turning to the Spending Review on 11 June for signals on public investment and pipeline priorities.
In a current tight labour market with overall low levels of unemployment and ongoing shortages of skilled and unskilled labour, new workload distribution and local availability of labour could hold the key to whether any influx of project work could result in tender price breakout. Also, while public-private partnerships (PPPs) might be the financial injection needed for momentum, PPP solutions can be time-hungry, so what presents as an easy economic solution may not be all that straightforward.
Margins under Pressure amid Rising Input Costs
Input costs forecast for 2025: Input costs forecast for 2026:
+4.15 +2.79%
full year 2025 (BCIS) full year 2026 (BCIS)
BCIS’s forecast input costs to rise by 4.15% in 2025 – far outpacing tender price growth. RLB’s weighted average for the year of 3.22%, falls short of cost inflation, raising concerns about squeezed contract margins in an already competitive landscape.
Jackie Pinder, Managing Partner for RLB Wales and South West comments, “While the Welsh construction sector shows signs of recovery in quarter two, challenges still persist. Labour shortages and increased investment in infrastructure are crucial to address ongoing barriers and sustain growth momentum.”
For RLB’s full Construction Market Intelligence Q2 2025, please visithttps://www.rlbinsights.com/publications/construction-market-intelligence-cmi-q2-2025/
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Image source: RLB