The recession in construction is looking increasingly desperate as the giant commercial sector appears to be heading for a nasty fall.

The latest round of data will be a massive body blow to those who sought comfort in the notion that the recession in construction might limit itself mainly to housing.

The release of the construction survey by the buyers’ body CIPS and yesterday’s commercial market survey by the surveyor’s body RICS both point clearly to a potential shuddering slowdown in work prospects in the sector.

For all the talk of Government winding up its spending, if the commercial sector takes a nosedive the chances of avoiding a deep recession are minimal. Things have just got very worrying indeed.

If the sector falls as hard as it did in the early 1990s that could mean a loss of up to £10 billion worth of work.

The RICS survey released yesterday showed a plunge in the already sliding figures for new development work. The figures are very ugly.

That said the impact on immediate workload may not be felt by all contracting firms, as the build out periods are relatively long, especially compared with most housing projects. The RICS survey tends to be ahead of the situation on the ground.

But in the months ahead we can expect to see increasingly numbers of contracting firms struggling ever harder to fill their forward order books. This will be matched with a wave of job cuts as firms rescale their businesses.

The CIPS/Markit survey of purchasing managers saw its construction index drop to a new low of 35.1 (against a no change mark of 50), driven down by the speeding decline in the commercial sector and the continuing carnage in house building.

And for the first time the survey’s index measuring confidence in future activity turned negative, reflecting the spreading gloom and the realisation that there will be no quick bounce back for construction.

In many ways this indicator could sound the starting pistol for deep cuts in the construction workforce as firms feel they can no longer hold onto their teams in the hope of an upswing.

And it will not help their confidence that the EU sees Britain as the worst bet economically among the major European players, with seven straight quarters of zero of negative growth in GDP in prospect.

While it is not all bad news – today’s announcement of BAA’s backing for Crossrail will increase the chances of the £20 billion worth of work progressing there – the crumbling state of workloads in the commercial casts a very long and wide shadow over the prospects for construction overall.

At £24 billion it represents 20% of all construction and more than a third of new work.

In the last recession the commercial sector fell by almost a half. The composition of the commercial sector is different now, with quasi-public sector PFI-type work within it.

But private offices and retail work still accounts for the lion’s share and that is looking extremely fragile.

If you were an investor in retail schemes or offices what would you do in a cash-strapped market in recession? Wait to pick up a bargain from a distressed seller, or take a risk on a new development?

My guess is that the answer to that is not one that is good news for construction.