For both consumers and construction firms inflation is becoming a real factor once again and maybe it is time to give much more consideration to how to deal with it.

I was brought up with inflation. I recall being told time and again by my parents how few pennies things cost in times past compared with today. We gasped at how cheap things had been, naturally ignoring the fact that relatively people were paid a pittance.

That was the seventies. We kind of knew what inflation was – it was part of life. We sort of factored it in.

There is now a generation of people who are as used to seeing prices going down as up. For the past decade we have seen clothes getting cheaper, we have enjoyed cheap food, we have seen anything vaguely technological getting better and cheaper simultaneously.

And for those of us who remember inflation, it seems such a long time ago now since it was a real issue that we probably have forgotten what it really means.

This raises serious questions about how well we will cope with inflation, which now seems to be rearing its head again. Will we overreact when demanding more pay or be embarrassed to ask for more? Likewise, will firms have the confidence to demand higher prices from their customers and clients, or will they threaten the security of their businesses by seeking to ride the storm until better times?

Obviously the Bank of England hopes that demands are restrained, otherwise it will bring out its interest rate club in an attempt to knock inflation on the head.

It will be a hard balance for policy makers, for individuals, families and firms.

And as I have mentioned many times before, inflation is a big issue for construction.

It will be particularly hard for construction firms, as they enjoy, by and large, very slim margins. Any price drop to clients or any cost rises not passed on will eat mightily into profits. It is all a question of leverage and it doesn’t work in the favour of price cutting to clients or holding prices when costs rise.

Inflation presents a further worry because if cost go up more than clients expect, there is a real possibility of projects being shelved.

So the data produced by BCIS on cost inflation in civil engineering should be seen as a wake up call for the industry at large.

BCIS figures suggest that inflation in civil engineering has been running in the year to the end of quarter 1 this year at a rate of 8.6%. And it forecasts inflation in the following two years to be above 7% and above 5%.

This will put a mighty strain on budgets, which in the case of Government will most likely result in a cut in the work undertaken. In the private sector rising costs of capital projects at a time when money is more expensive may well mean some schemes no longer make financial sense.

Either way inflation is something that today’s construction professionals will need to come to appreciate in a way that they have not had to, for many a year at least.