Gardiner + Theobald Cuts 2026 Tender Inflation Forecast to 3.25%

Gardiner + Theobald has cut its 2026 UK tender price inflation forecast to 3.25%, down from 3.5%, as Tier 1 contractors sharpen bids to fill softening workloads. The cost consultant's Autumn Market Update also trims London's forecast to 3.5% from 3.75%, with quarter-point reductions for the South East, South West and East Anglia. Forecasts for all other regions are unchanged.

G+T said the market was becoming "more selective, not cheaper", with improving main contractor appetite masking a squeeze on specialist capacity.

Where is the price pressure coming from?

Tier 1 firms are engaging more actively on selected 2027 opportunities as workloads soften. But competing bidders often draw on the same narrow pool of MEP, façade, steelwork and other specialists.

G+T consultants warn that longer tender lists should not be read as more capacity to deliver.

The report found a sharp split by project size:

• Well-prepared schemes in the £10m–£30m bracket still attract stronger competition.
• Larger jobs, particularly those above £50m or carrying greater complexity, struggle to secure a strong field of capable bidders.

Contractors are also tightening their bid selection. G+T's surveys found 69% were more selective than a year ago, having on average booked around 60% of their 2027 workload.

Is the pipeline actually turning into work?

The pipeline is growing, but confidence that jobs will reach site is weakening. While 46% of respondents reported more opportunities over the past year, 73% said the likelihood of projects proceeding had deteriorated.

Affordability and viability are the biggest brakes, followed by funding availability and financing costs.

By trade, the capacity picture diverges sharply:

• MEP remains the clearest pinch point, with 68% reporting tightening availability.
• Structural steel and façades also face pressure.
• Groundworks and demolition are easing, with improving competition and available capacity.

Risk is feeding directly into bids. More than half of respondents said contract terms and risk allocation were pushing prices up, while compressed programmes and immature designs were driving higher allowances and qualifications.

For clients, the implication is stark: headline tender inflation may be cooling, but bottlenecks in the specialist trades that determine deliverability mean savings will only reach well-prepared, realistically programmed schemes — and 2027's already 60%-booked workloads give contractors little reason to chase the rest.