Contractors and subcontractors continue slashing their prices on submitted bids for projects as work remains scarce, according to industry research firm Rider Levett Bucknall (RLB), largely eroding already scant profit margins.

Materials costs are up more than 7 percent in the past year, but those increased prices are not being reflected in Boston-area bids – meaning, in some cases, that the hard hats are losing money at the expense of securing work.

This quarter, bids for average office/mixed-use projects are coming in at approximately $16.7 million, an increase of just 0.64 percent over last year. Last quarter’s increase was 0.82 percent.

"A lot of contractors are pretty desperate for work, so they’re losing money to make any money," Julian Anderson, president of RLB, told Banker & Tradesman. "We know that bid prices are rising slower than expected, and contractors and subcontractors are still cutting their bids."

Even so, thanks to Massachusetts relative economic stength, there are some bright spots in the construction landscape, especially in the life sciences sector.

Just last week, Skanska USA’s Commercial Development unit in Boston broke ground on a $70 million lab and office building at 150 Second St. in Cambridge. The project is Skanska’s first commercial real estate investment in Kendall Square.