The Scottish Tender Price Assessment Panel, which was established by the Building Cost Information Service (BCIS) to help measure the trend of contractors’ pricing levels in accepted tenders in Scotland, reported an annual increase of 3.4%.

BCIS chief economist, Dr David Crosthwaite, said: “Of the panellists who said there is differential movement in Scotland between projects of different sizes, they said larger projects are typically attracting higher proportions of overheads and profit, while projects below a value of around £5 million were said to have slightly higher cost movement.

“All of the respondents said there was differential movement between mechanical and electrical (M&E) work and building work, with labour constraints again cited among the causes.

“They agreed that it’s still a struggle to get tenders back for M&E packages and there doesn’t seem to be an appetite for smaller contractors to scale up. Because of this, there’s still a restricted marketplace in Scotland, with limited capability for firms to take on bigger projects.”

Most panellists (80%) reported that the desired number of suitable tenderers were found after searching, while 20% said contractors were more eager to tender in 1Q 2025.

Panellist responses suggested a slightly more positive pipeline for the next 12 months in 1Q2025 than was reported in 4Q 2024.

A total of 40% said their anticipated pipeline of projects going to tender has slightly increased, a further 40% said it is unchanged, and 20% said it had reduced slightly.

Dr Crosthwaite added: “Our panellists commented that contractors typically have more availability and need to secure work, but that they are still selective on what they will price.

“As was also reported by our Scottish contractors panel, the impact of increases to employers’ National Insurance contributions is being reflected in tenders and is also triggering change in law compensation events in contracts for work running past April.

“While the Scottish budget was said to have provided some clarity, for example with healthcare projects, our panel said it was otherwise a mixed picture and public sector finances remain tight.”