Building costs will increase by a predicted 14% over the next five years up to Q2 2030, with tender prices rising by 15% over the same period, according to the Building Cost Information Service (BCIS).

New work output is expected to grow by 18% between 2025 and 2030.

Dr David Crosthwaite, chief economist at BCIS, said: “At the mid-point of the year, the construction sector is still stagnating, with output growth subdued. Confidence continues to be weighed down by a combination of domestic uncertainty and wider global pressures.

“That said, the 27% quarterly rise in new orders we saw in the first quarter, particularly in infrastructure and industrial sectors, offered a welcome indication that demand could be starting to recover.

“How far that optimism carries through will depend heavily on the translation of the government’s Spending Review and 10-year strategies into actual activity. For all the announcements made by the government in the last few weeks, we still don’t have sight of the long-promised updated project pipeline. A greater degree of certainty around funding and delivery timelines remains key to lifting the sector out of its current malaise.”