The plant hire sector is showing signs of weakening along with the slowdown in growth in construction.

The latest Index of Services figures show the lowest level of output from firms renting machinery and equipment since May.

The graph above tracks this output on a quarterly basis against construction output. And not surprisingly the correlation is about as close to bang on as one might expect.

As an aside, this will provide some comfort for the statisticians at ONS who produce the output figures. I am told to two sets of data are sourced separately.

A further point of interest, in the light of the previous blog, is that price changes in the plant sector seem to track about six months after shifts in activity.

So it is just possible that the inflation we have seen in the sector may be constrained to some extent in the future. But I wouldn’t bank on it because there will be a complex of factors driving inflation at this point in the cycle and not just demand.