BCIS Tender Price Index Q4 2008
HONG KONG, April 29 /PRNewswire-Asia/ -- Tenders prices are falling as contractors compete for less work, according to the latest Tender
Price Index compiled by BCIS, the Building Cost Information Service of the RICS, published on 28 April 2009.
New orders for construction work fell again, with a drop of 8 percent in Q4 and 28 percent from the previous year. In line with this, the price of new construction work fell by 2.0 percent in Q4 2008 compared with the previous quarter and the same quarter a year earlier, with a fall of a further 8.0 percent predicted by BCIS over the course of the year.
Costs are still going against the current falling inflation trend with an annual rise of 7.7 percent for materials and 4.8 percent far wage rates, placing further pressure on struggling firms.
A sharp decline of 12 percent in new work output is expected during 2009 with a more moderate fall of 2 percent expected in 2010 with growth returning to the industry in 2011. It is those operating in the private sector, particularly in housing, commercial and industrial that will suffer the most.
The public sector should fare better over this period, particularly if the measures announced in the recent budget prove successful and have the necessary impact. Public non housing and infrastructure should continue to grow if public funding is both forthcoming and timely.
With BCIS analysts not expecting new work output to grow until 2011, Tenders are expected to fall by 8.0 percent in 2009 and 1.4 percent in 2010.
Peter Rumble, BCIS Information Services Manager comments, "It is clear that demand is now the main driver for setting tender prices. As this is falling it is being reflected in declining tender prices. Contractors are being left with little choice but to keep tenders as low as possible as competition for work reaches new highs and they can no longer pick and choose projects. It is going to be tough over the next two years and those that are focused on private sector work are going to suffer the most. With the significant contraction of work over the next two years, the rate of unemployment in the industry will undoubtedly rise sharply, with the loss of skilled tradesman, some of whom will not return to the industry once work begins to pick up."
Tender Prices (Annual Percentage Change):
http://www.creativegp.com/RICS/BCIS Tender Price Indice Q4/Graphic_Eng.jpg
About RICS & RICS Asia
RICS (Royal Institution of Chartered Surveyors) is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity - providing impartial, authoritative advice on key issues affecting businesses and society.
RICS is the worlds' leading qualification when it comes to professional standards in land, property and construction. With over 140,000 members globally, RICS represents, regulates and promotes the work of property professionals throughout 146 countries.
The RICS Asia supports a network of over 11,000 individual professionals across the Asia region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members.
The RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People's Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan, The Maldives, The Philippines, Timor East and Vietnam.
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