The increasing prices of important products have resulted in decreased optimism in the construction industry, according to the Civil Engineering Contractors Association (CECA).
In its Workload Trends Survey, respondents reported metal prices were up by an average of seven per cent compared to figures from 12 months ago, while fuel costs had jumped ten per cent.
Most other basic materials are also more expensive, with prices rising faster than last year, the research found.
However, labour costs have remained static.
Rising global demand, such as in emerging markets, was to blame for the higher prices.
CECA director of external affairs Alasdair Reisner said: “Inflation has risen rapidly up the list of our members’ concerns and these figures show why.”
If this trend continues, it is feared that it could result in a contraction in the industry.
Recent data from the Office of National Statistics revealed that the total output in the construction sector fell by four per cent during the first quarter of 2011 compared to the fourth quarter of 2010.