M&E inflation is set to ease this year, according to the latest survey of the sector’s contractors by Gardiner & Theobald (G&T).
Published in January, the survey says that MEP contractors anticipate package inflation will be an average 4.6% in 2024 – down from 5.3% last year.
Recent improvements in component inventories and easing demand has softened price inflation, according to G&T. This means that, although improvements vary ‘wildly’ by component, the general pricing outlook has improved compared with 2022.
However, MEP can be prone to ‘sudden price spikes’, G&T adds, because many critical materials and engineered components are manufactured outside the UK. This means greater exposure to currency movements, worldwide political events, and competition from international demand.
According to surveyed contractors, workloads in the sector are holding up, supported by the decarbonisation agenda, a push toward renewables, plant replacement in end-of-life buildings, and rapidly evolving building technologies.
Almost all contractors that responded expect turnover to grow and input costs to ease, but there are concerns that certain workflows may become quieter in 2024.
