Mace Consult is warning clients to avoid cut-price bids from contractors as material price rises continue easing.

The firm’s latest UK Market View report warns developers to steer clear of contractors dropping prices heavily to win work as company failures continue to hit supply chains.

Andy Beard, Global Head of Cost and Commercial Management, Mace, said: “Over the past quarter, material prices have continued to drop and there are now signs that labour costs are starting to fall. While this is good news, developers need to be careful of those who are aggressively cutting bid prices.

“Weakening pipelines are likely to encourage some firms to squeeze prices by more than is achievable to secure work.

“Supply chains are still fragile, and work won at ultra-low prices won’t help to repair them.

“As a sector we should work together to ensure all of those we work with are able to remain in business, as more insolvencies will only reduce competition for supplies, potentially driving construction costs upward once more.”