The latest trade survey covering both the contracting and materials sectors underlines both the depth and the rate of decline in the construction sector with pessimism rampant across all sectors.

As in all surveys there are glimmers of light and hope. The survey, compiled by the Construction Products Association, showed that there was an “on balance” improvement in inquiries for public sector work and for repair and maintenance work across the board. And costs have fallen sharply for most contractors.

Perhaps it is here where most interest lies in the numbers. The survey hints that materials costs may be set to rise, having ticked up in the past quarter. From a contractor’s point of view the good news is that the falling cost of labour has more than compensated.

But the figures for materials costs may be the first sign that, after many quarters of downward pressure, materials firms have adjusted their capacity and can start to price at levels more sustainable in the long term.

This certainly is something that contractors should be keeping a close eye on. There is likely to be much more to come out of labour prices, but a sustained rise in materials costs could put already fragile tenders onto the critical list.

The survey shows that tender prices and margins are almost universally under intense pressure. And it is likely to prove to be squeezed profits more than squeeze turnover that determines the fate of firms within the industry.