Cost consultant EC Harris has put back its forecast recovery in tender prices by six months because of continued falls in workloads, flat labour and material prices and falling commodity prices.

Overall tender prices in London are expected to show no change until the third quarter of 2013 and then rise by 2.6% in 2014.

Outside London, tender prices are forecast to fall by 0.9% in the year to the third quarter of 2013, and rise by 0.9% the following year.

Infrastructure tender prices, on the other hand, are predicted to rise by 1.6% this year to the third quarter of 2013 and by 2.8% over 2014.

This is being fuelled by continued spend particularly in the rail and water sectors.

Paul Moore, Head of Cost Research at EC Harris said: ”Despite an end to the UK’s recession, the continued poor showing of the construction sector and the weakening world recovery is depressing the construction market.

“The only two bright spots are infrastructure, which is showing a healthier pipeline of work, and some parts of the private residential sector.”

EC Harris’ Market View also warns that, once recovery does commence, there is a danger that tender prices on some projects could escalate rapidly.

This view is based on evidence from the last recession in the early 1990s, when tender prices rose quickly, before levels of workload recovered.

Moore said: “A lot of pressure has built up in the industry over the past four years of price falls, particularly within the supply chain which has had to hold down their prices.”