Construction costs rise in UK and New Zealand

New reports indicate rising costs across the construction sectors in the United Kingdom and New Zealand.

In the UK, the Building Cost Information Service (BCIS) forecasts that building costs will increase by 14 per cent over the next five years. While tender prices are also expected to rise by just over 14 per cent, building costs are projected to outpace tender prices in the near term as contractors absorb higher input costs to remain competitive amid weak demand. Total new work output is expected to contract by 3.7 per cent in 2026 before seeing modest growth through 2031.

In New Zealand, the Cordell Construction Cost Index shows that residential building costs rose by 1.7 per cent in the third quarter, the fastest quarterly increase since late 2022. This brings the annual growth rate to 4.8 per cent, exceeding the long-term average of 4.0 per cent. The increase is driven by higher costs for materials, freight, and fuel, with significant price hikes noted for petroleum-based plumbing products, PVC, sealants, and structural steel.