Gardiner + Theobald (G&T) has lowered its forecast for UK tender-price inflation in 2026 to 3.25% from 3.5%. That is a slower forecast rate of price growth—not a forecast that tender prices will fall. The Autumn Market Update points to a split market: softer workloads and greater contractor selectivity are tempering competition in some areas, while limited specialist capacity and project risk continue to support costs.
What the revised 2026 forecast means
The 3.25% figure is G&T’s forecast for annual UK tender-price inflation in 2026, as reported by Construction Enquirer on 6 October 2026. It does not mean tender prices are expected to be 3.25% lower, nor does it predict the price of any one project. A lower inflation forecast means the expected pace of tender-price increases has eased compared with the previous 3.5% forecast.
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G&T’s regional forecasts did not all move together. London’s forecast was cut to 3.5% from 3.75%; the South East, South West and East Anglia also had quarter-point reductions. Forecasts for the remaining regions were unchanged, according to Construction Enquirer’s account of the Autumn Market Update.
Why a cooler forecast does not mean every tender is cheaper
Contractors are becoming more selective as workloads soften, but selectivity is not the same as spare capacity across every trade. G&T’s reported characterization is “more selective, not cheaper.” A project may attract more interest from main contractors while still carrying firm prices for specialist packages that are difficult to resource.
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In G&T’s 2026 survey, 69% of surveyed contractors said they were more selective than a year earlier. They had booked about 60% of their 2027 workload on average. The same report said 46% saw more opportunities over the past year, while 73% said the likelihood of projects proceeding had deteriorated. These are survey responses reported by Construction Enquirer, not a measure of every contractor’s workload or a guarantee of future bidding behaviour.
The practical distinction is between the number of firms willing to tender and the capacity available to deliver the full scope. Several main contractors may compete for a project while depending on the same limited pool of specialist subcontractors. That can leave headline competition stronger than the capacity of particular packages suggests.
Which projects and trades face the most pressure?
| Factor | What G&T’s reported survey indicates | What it may mean for procurement |
|---|---|---|
| Project size and complexity | Well-prepared projects valued at £10m–£30m attracted stronger competition. Projects above £50m or with greater complexity struggled to secure a strong field of capable bidders. | Do not assume a healthy bidder list for a smaller, ready-to-price scheme will translate to a larger or more complex project. |
| MEP | 68% of survey respondents reported tightening availability. | Allow time to develop and procure mechanical, electrical and plumbing packages; availability constraints can limit competition or add cost allowances. |
| Structural steel and façades | Both were reported as under pressure. | Test package capacity and lead times early rather than relying only on the main-contract tender period. |
| Groundworks and demolition | Pressure in these areas was reported as easing. | Conditions may be less constrained than in MEP, steelwork or façades, but this does not establish a lower price for a particular site or scope. |
The survey’s trade findings describe reported market conditions, not a price index for each package. They are most useful as a warning to examine the project’s actual supply chain rather than apply the national forecast uniformly.
How design, programme and contract risk affect bids
G&T’s reported October findings identify risk as another source of tender pressure: more than half of respondents cited contract terms and risk allocation as pushing prices up. Compressed programmes and immature designs were also associated with higher allowances and qualifications. When bidders cannot confidently price scope, time or liability, they may protect themselves through contingency, exclusions or conditions rather than submit a clean low price.
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Affordability and viability were identified as brakes on projects proceeding, followed by funding availability and financing costs. A project that is technically ready but lacks credible funding or a workable commercial structure may not convert into a live tender. Conversely, a mature design, realistic programme and balanced allocation of risk can make pricing more comparable and improve the chance of securing capable bidders; they cannot remove underlying trade shortages.
How the London evidence compares
AECOM’s separate London Main Contractor Survey reported combined Tier 1 and Tier 2 tender activity of 64% in 2025, up from 59% in 2024, and London contractors expected 3% inflation in 2026. AECOM said its survey drew on contractors with combined turnover of £6bn. These are London-specific survey measures and expectations; they are not the same measure as G&T’s UK-wide 3.25% tender-price inflation forecast. AECOM’s report also quoted Brian Smith, its head of cost management and commercial, saying: “Inflation and labour shortages continue to hamper an increasingly competitive London construction market.” See AECOM’s 5 February 2026 report.
What project teams should do with the forecast
- Use 3.25% as a market-level forecast, not a project allowance. Reassess the estimate against location, scope, procurement route, design maturity and the timing of each package.
- Check specialist capacity before fixing the tender timetable. In particular, test MEP, steelwork and façade availability with the relevant supply chain.
- Make the project priceable. Resolve design gaps, set a credible programme and review whether contract terms place risks with the parties best able to manage them.
- Separate bidder interest from delivery capability. Assess the experience and capacity of the proposed supply chain, not only the number of main contractors invited or responding.
- Review the funding and viability case. A competitive tender cannot compensate for a project that is not ready or funded to proceed.
These checks help explain why bids may diverge from a national forecast. The Autumn survey findings were relayed by Construction Enquirer; the underlying G&T report and full survey methodology were not available in that account, so its percentages should be read as attributed survey results rather than independently audited market statistics.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Earlier input-cost context is not the Autumn forecast
In its separate Q2 2026 market-intelligence update, G&T reported the Department for Business and Trade’s “All Work” construction materials price index at 158.7 in March 2026, up 2.6% year on year and 0.9% month on month. That is an earlier materials-input measure, not the Autumn tender-price forecast, which concerns tender prices and reflects broader market conditions. G&T’s Q2 discussion described MEP as a major inflation risk because of specialist labour constraints, imported-equipment exposure, design responsibility and package complexity. It also noted better general materials availability than during the 2021–23 disruption period and limited cost pass-through in some areas under soft demand. This earlier context helps distinguish input costs from tender pricing; it should not be treated as the Autumn update’s methodology or as a new Autumn finding. See G&T’s Q2 2026 input-cost update.
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