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UK market view: Q1 2025

Pick-up in tender prices despite weak growth 

Key takeaways

0.4%

growth in construction output last year

6.5%

increase in regular construction earnings since 2023, with considerable acceleration last year

4.5%

interest rate set by the Bank of England in February

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The UK economy’s struggles continued in the final quarter of 2024. Growth of 0.1% followed no change in Q3 and, despite the more promising first half of the year, GDP only increased by 0.9% last year. Conditions in construction were even weaker as the industry mustered growth of only 0.4% in 2024. With all new work shrinking by 5.3%, many contractors likely found a shortage of work and opportunities. In spite of this unfavourable backdrop, we have decided to slightly increase our tender price forecasts both for 2024 and 2025. The reasoning behind deciding to increase our 2024 figure for tender price inflation by 0.5% is straightforward. 

Read our latest UK market view report to find out more. 

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