The price of construction work fell by 0.8% in the third quarter of 2008 according to the latest Royal Institution of Chartered Surveyors building cost information service survey and it expects tender prices to continue to fall by a further 10% during 2009 and 2010.
Overall orders for construction in the third quarter were 10% below the previous quarter and 18% below the equivalent quarter of 2007.
But costs continued to rise with materials up 7.2% and wages up 4.6%.
The Institution expects new work output to fall 7% this year and a further 3% next with the biggest downturns in housing, private industrial and private commercial. No growth is expected before 2011.
"The next two years are going to be tough on the construction industry," said BCIS information services manager Peter Rumble.
"Contractors who traditionally carry out a significant proportion of public sector work are likely to fair better than those carrying out mainly private sector work.
"However this is assuming that a prompt release of public funds is delivered, as promised in the pre-budget report, which is already looking unlikely."
