Mace’s Market View report has forecast tender price inflation of 5.5% in 2022, due to Russia’s ongoing invasion of Ukraine
Mace’s Market View report for Q1 2022 forecasts that Russia’s invasion of Ukraine will contribute to tender price inflation of 5.5% in 2022.
The analysis shows that gas prices increased substantially in the second half of last year, with Brent Crude oil prices rising above US$120 per barrel, due to Russia’s invasion of Ukraine.
Higher prices for construction materials
The Market View warns that higher energy costs could impose higher prices on products such as bricks, plasterboard and glass, putting supply chains under pressure.
While construction output in 2021 finished with robust growth in November and December, the report states that higher energy and material costs, coupled with rising interest rates, could adversely impact output in 2022.
Matt Fitzgerald, commercial director at Mace Cost Consultancy, said: “Construction orders look strong as we go through the first quarter of 2022 however this growth is likely to be tempered by geopolitical factors driving rising oil and gas prices.
“This, combined with inflation, interest rate and taxation rises will put pressure on the cost of living, the cost of borrowing and construction costs which in turn may translate into a slowing of growth in the economy over the medium term.”
