Tender prices are bumping along the bottom. Declining sentiment arising from financial markets' uncertainty have reduced the outlook for recovery. Spare capacity in the industry will reduce the likelihood of short-term price rises in London and elsewhere. Building costs rose 3.3% in the year to the third quarter 2011. Materials price inflation has eased over the last three months but the national wage agreement has brought in a small increase for building operatives for the first time in more than three years. Building cost inflation over the year ahead is likely to be of similar magnitude.
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