The evidence remains strong that prices in construction remain heavily squeezed despite the easing in the recession providing scope for many service providers to push up prices in other sectors.
The ONS’s experimental services producer price indices provide data on price movements across a range of businesses providing services to other businesses. The selection includes construction plant hire.
The aggregate figures suggest that inflation is once again pressing on business costs, with prices for freight forwarding, motor vehicle maintenance, computer software and advertising rising strongly.
In the latter three quarters of 2009 prices for services had been lower than a year earlier. They rose by 0.8% in the first quarter of this year.
But for beleaguered construction plant hire firms there has been no uplift. Prices fell a further 0.9% according to the figures produced by ONS and were down 5.9% on a year earlier.
This suggests that from a peak in 2006 prices have fallen about 9%.
As the graph sourced from ONS figures shows this fall corresponds to the drop in construction workload.
So there appears little hope of a respite for suppliers to construction from downward price pressure as the industry reshapes itself for a brave new world with lower levels of work.