Our analysis of those drivers on a global basis may show differences within regions but there are some common themes at a macro level.
Following a prolonged period tracking above general inflation, input costs have eased back in the overall impact they have on construction escalation
The global economic outlook for the year ahead is mixed, both by region and sector. This is playing through to prospects for construction output and as a result the impact on tender pricing. View variances in global GDP forecasts.
Even where forecasts are positive, there is uncertainty in many markets leading to some hesitation and delays in projects starts. Global tender prices are certainly more muted than 12 months ago and, in some regions, showing deflation.
Our analysis of sectors across the regions in which we operate is also varied. In the preceding 12 months, more sectors have moved into a trough period of activity (showing less output and pipeline). There has been a swing of 6% of sectors into the trough of the cycle.
Infrastructure and healthcare are the stand-out sectors that are showing a shift to peak output and pipeline, which may be hardly surprising with over half the global population having gone to the ballot box in 2024. New or returned governments need to show demonstrable benefit to their electorates.
For those clients with a global reach, the overlay of their supply chains onto the regional drivers will be meaningful to assess the impact on projects. For those project teams operating solely in regional markets, such is the global connectivity of our global supply chains, costs are impacted by a complex mix of regional factors, global market conditions and risk.
Keeping close to regional market conditions while also looking through the wide-angle lens of global influences will be key to navigating the year ahead.
In summary, we therefore expect to see in the next 12 months:
Paul Beeston
Partner – Head of Industry
and Service Insight
RLB UK
paul.beeston@uk.rlb.com
