The past five years have redefined the meaning of market volatility. Prices move faster than projects progress, and valuations struggle to keep pace. For commercial managers, the challenge is balancing fairness and caution when valuing work in a shifting market.
1. The New Normal of Instability
Materials, energy and labour costs remain unpredictable. Even as some commodities stabilise, others fluctuate without warning. Contractors must price for uncertainty, yet clients expect cost certainty. The resulting tension is commercial, not technical.
2. Interim Valuation Discipline
Interim valuations must reflect reality on site, not hope or fear. Both overvaluation and undervaluation create risk. Commercial teams should apply measured quantities, verified progress, and clear photographic evidence to support every application. Consistency in approach builds trust and protects cashflow.
3. Managing Change Events
In volatile conditions, variations must be valued promptly. Delayed pricing magnifies exposure to rate drift. Where open-market rates are unavailable, commercial managers should agree provisional allowances subject to later adjustment. This maintains transparency and reduces dispute potential.
4. Indexation and Escalation
The use of BCIS indices remains widespread but imperfect. Indexation captures trend, not transaction. Smarter contracts now adopt hybrid approaches, combining defined-cost recovery with capped escalation. This protects both sides and reflects the shared risk inherent in volatile supply markets.
5. Maintaining Commercial Fairness
Fair valuation does not mean generosity; it means proportionality. QSs’ should ensure that all parties understand the valuation logic and that it aligns with the contract’s risk allocation. Regular joint reviews and open data sharing preserve relationships even when costs rise.
Closing Reflection
The market may fluctuate, but professionalism must remain steady. Valuation under uncertainty is the true test of a Quantity Surveyor’s judgment by balancing evidence, fairness and foresight in equal measure.
