Cost forecast predicts 5% inflation
New analysis by cost consultancy firm Arcadis predicts that annual inflation could rise to 5 per cent as the industry ‘overheats’ from a faster than expected recovery.
Arcadis also forecasts a “major acceleration” in price increases for infrastructure, and a “more modest” expansion in the buildings sector from 2022.
Agnieszka Krzyzaniak, Market Intelligence Lead at Arcadis, said to Construction Enquirer: “The conditions for investment are good, but with so many challenges on the horizon, the situation can change abruptly.
“At the moment, there is still some spare capacity available, but the shortages of construction materials create inflationary conditions that have already begun to outweigh any deflationary factors.
“Clients need to move quickly to take advantage of this window of opportunity.
“Any delays increase the potential exposure to much higher construction costs than initially planned for, as higher inflation becomes the new normal.”