According to leading global quantity surveyor and cost consultant Rider Levett Bucknall’s Global Annual Report 2025, released today, there is a significant shift in the forces driving tender prices.
RLB’s report reveals a marked departure from input costs as the primary driver of tender price increases. Geopolitical risks, including elections and government policy changes, now play a considerably larger role.
Commercial factors, driven by market sentiment and contractor risk assessment, are also increasingly influential in shaping pricing strategies, while the impact of input costs, such as materials and labour, is diminishing.
Navigating uncertainty into the future
According to RLB’s Global Report, navigating uncertainty into the future requires careful consideration of geopolitical and commercial risks in project planning and budgeting, and it’s crucial to understand the evolving impact of input costs and market sentiment on pricing strategies.
Global economic outlook
Despite geopolitical shocks, a pandemic, and an energy crisis in recent years, the global economy has shown resilience, according to the Organisation for Economic Cooperation and Development (OECD)’s latest analysis (December 2024).
Both the OECD and International Monetary Fund (IMF) (January 2025) project global growth at 3.3% for 2025 and 2026, which, although somewhat muted in historical terms, remains positive alongside the ongoing decline in inflation levels.
The IMF notes that policy-generated disruptions to continued disinflation could still impact any easing of monetary policy.
Regional economic outlook
Key regional highlights include:
North America: Public sector spending fuelled growth in 2024, counterbalancing the slowdown in private construction due to high interest rates. Persistent labour shortages continue to pose a major challenge.
Europe: Economic stagnation and geopolitical risks are significantly hindering investment in the construction sector, particularly in northern Europe, while southern regions experience some growth in tourism and renewables but face similar labour challenges.
North Asia: Construction activity showed stability or slight decline in 2024, with data centres, industrial sectors, and infrastructure displaying positive growth. The ageing workforce presents a significant future challenge.
Southeast Asia: Steady growth is projected for 2025, driven by robust investment in infrastructure, data centres, and renewable energy, although each market faces distinct local challenges.
Middle East: Large-scale projects and strong economic activity sustain dynamic growth, despite rising construction costs and inflation, with the UAE and KSA leading the way.
Africa: Investment continues to be heavily linked to inflation and political stability. While some regions show robust growth in specific sectors (e.g., residential in Johannesburg, mixed-use in Cape Town), political risk and instability remain significant concerns.
Oceania: High interest rates and supply chain issues are hindering construction in both Australia and New Zealand. However, the substantial backlog of projects in Australia and downward price pressures in New Zealand suggest opportunities for future growth.
Tender price forecast
Globally, tender price figures projected at the time of the last RLB Global Annual Report (June 2024) have been softened slightly. As 2024 progressed, many of the projections for that year were revised downwards, as seen in North America and North Asia.
Using an arithmetic average, the overall downward revision for 2024 is about 0.8%. However, the standout region is Australia, where 2024 figures for most locations have been revised upwards, although again only slightly.
Looking ahead, the forecast figures presented for 2025 and beyond, in this edition of the RLB Global Annual Report, show relatively little change from the previous forecasts. This suggests a stabilising, or at least embedding, of the underlying understanding of tendering risk amidst various influences.
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