Savills ProgrammE and Cost Sentiment Survey

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Upward cost pressure in some sectors

Since the last update to the index, the property and construction markets have adapted well to the challenges faced from bringing forward new schemes in a pandemic. New working practices have, generally speaking, increased project timescales, and increased costs have been absorbed by contractors who have been busy trying to fill their order books.

The main property sectors have been performing differently, however, which impacts the make-up of our index. The logistics sector has seen record levels of take-up and 'build to suit' development meaning resources are stretched, and contractors are being more selective. The retail sector, on the other hand, is adapting to a world where dwell time is no longer important, and the speed at which the consumer can pass through the store is a key factor, meaning that contractors are busy refitting and redesigning stores to reflect the new normal.