RICS: Tenders Continue to Fall in UK as Workloads Plummet

BCIS Tender Price Index Q1 2009

HONG KONG, Aug. 6 /PRNewswire-Asia/ -- Tenders prices in UK remain depressed as construction workloads continue to fall, according to the latest Tender Price Index compiled by BCIS, the Building Cost Information Service of the RICS, published recently.

Declining workloads continue to be the main driver for lower tenders as contractors have to keep prices at a minimum to remain competitive. New orders for construction fell 19 percent in the first quarter of the year, and were a massive 38 percent lower than the same period a year earlier. One consolation is that costs do not appear to be rising as steeply, offering relief to those contractors whose margins were becoming very narrow.

Looking ahead workloads are expected to continue falling sharply throughout 2009, and only fair slightly better in 2010, where the falls will be more moderate. Growth is not expected again until 2011 and as a result tenders will fall another 6.1 percent over the coming year, with a slight rise expected by 2011 of 0.5 percent.

Similar but improved results are also reflected in Hong Kong construction market. Mr. Kenneth Kwan, spokesperson of RICS Hong Kong, says "The fall in tender prices between the third quarter of 2008 and the first quarter of 2009 was 12 to 13%. In recent months, although the general sentiment regarding the future economic outlook has improved, tender prices in Hong Kong still remain suppressed due to a lack of large scale development projects in the market. However, with more public sector and infrastructure projects expected to be available in the market in the latter part of this year, it is likely that tender prices will tend to reverse their downward trend and show some mild upward swing towards the end of the year. Also, tender prices in major cities in China are expected to stabilise and will probably recover mildly in the second part of this year as in recent months, we have seen increased construction activities amid a much improved sentiment that China's recovery from the economic downturn is in sight."

Please click on the link below for the Tender Price Inflation Chart (Year on year % change):

http://www.creativegp.com/RICS/BCIS%20Chart_20090806_ENG.jpg

About RICS & RICS Asia

RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 140,000 members globally and represents, regulates and promotes the work of property professionals throughout 122 countries.

The RICS Asia supports a network of over 9,000 individual professionals across the Asia Pacific region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members.

The RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People's Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit: http://www.ricsasia.org .

Media enquiry, please contact:

RICS Asia Public Relations Representative

Ms Belinda Chan / Ms Kate Kwan

Tel: +852-2372-0090

Fax: +852-2372-0490

Mobile: +852-9379-3045 / +852-9077-1337

Email: belinda@creativegp.com / kate@creativegp.com