Construction inflation since 2019

  • How much has the construction cost inflation in the UK?

    The construction output price in the United Kingdom has reached an annual growth rate of 4.6 percent in June 2023.
    Construction costs have been increasing at a lower rate than in 2022, when the year-over-year growth rate reached over 10 percent in May and June of that year..

  • What is the construction cost?

    Construction Cost means the total cost of the work to the owner of all elements of the project designed or specified by the design professional including the cost at current market rates of labor and materials furnished by the owner and equipment designed, specified or specifically provided by the design professional..

To put that metric in perspective, the nonresidential construction inflation rate was 4.4% in 2020 and 1.8% in 2019, an inflation rate that most contractors are 

How does inflation affect construction costs?

Inflation is causing an increase in the prices of materials, machinery and other inputs to construction projects

Where no other option is left to project parties than delaying the project in order to prevent cost overrun, which are primarily due to inflation

Building materials impact 35% to 60% of overall construction cost , ,

Why does construction cost increase a year?

One of the reasons for this is that the building materials, labour and machinery cost increases annually due to inflation

Inflation plays a vital role in the price increase of materials, labours, and machinery, which results in deviating the initial and the final cost of the project

Will construction costs increase in 2022?

Joe Martin, BCIS Lead Consultant added: “The pressure on materials prices and availability is expected to continue at least until the end of 2022

Labour shortages are expected to evolve as the significant driver for overall construction cost increases next year and the construction sector would need to compete for it with other sectors”


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