19/10/2026
INDUSTRY INSIGHT | Rising Costs, Competitive Tenders
Construction input costs are rising again, but those increases aren't necessarily flowing through to tender prices.
Rider Levett Bucknall's September Quarter 2026 Construction Market Update highlights renewed pressure on fuel, freight and construction materials, driven partly by ongoing conflict in the Middle East.
Some key findings:
● Diesel prices have approached $2.50 per litre, increasing transport and delivery costs.
● Concrete suppliers have reinstated delivery surcharges of approximately $7–$9 per cubic metre.
● Plastic pipes and fittings have experienced price increases of approximately 30%, with little evidence of prices returning to previous levels.
● Renewed input cost pressures are adding an estimated 2–4% to project costs, depending on project characteristics.
Despite these pressures, competitive tender markets are forcing many contractors to absorb additional costs rather than pass them directly to clients.
Regional Queensland is experiencing a different dynamic.
RLB forecasts construction tender price escalation of 5% in Brisbane and 7% in Townsville for 2026.
In regional North Queensland, tender price differences of 20% or more are becoming common on some smaller government projects, reflecting significant variations in contractor capacity, market appetite and risk pricing.
SPC's Perspective:
For project owners, competitive tendering presents opportunities, but a low price doesn't always mean cost certainty.
Contractors absorbing rising costs may have limited capacity to manage further increases, making tender qualifications, escalation provisions and risk allocation particularly important.
For regional projects, early market engagement, appropriate procurement strategies and a thorough assessment of tender pricing can make a substantial difference to project outcomes.
The lowest tender price isn't always the lowest project cost.
SPC
