Output in the UK's construction industry has fallen by over £1 billion between January and March this year, according to new figures.

The latest Office of National Statistics (ONS) data states output declined by 2.7% in March, the biggest drop seen since August 2012.

Overall, the fall was spearhead by a .8% decline in public house building activity and a 5.9% reduction in public non-housing work. In addition, private housing output recorded a fall of 1.6% over the quarter. Compared with Q1 2017, output was 4.9% lower during Q1.

Rebecca Larkin, Senior Economist at the Construction Products Association, said the latest figures confirms construction had a poor start to 2018.

"The 2.7% contraction in output was revised up from the initial estimate of a 3.3% decline, but this still represents the weakest outturn since August 2012 and a £1.04 billion loss in output in three months," she said.

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"Output declined in each month of the quarter, undoubtedly capturing the pauses in work relating to Carillion's liquidation in January and the snow disruption in February and March.

"Notably, private housing lost its position as the industry's star performer, with output falling from a record high, but activity is expected to accelerate as we enter the Spring selling season."

Blane Perrotton, Managing Director of the national property consultancy and surveyors Naismiths, said the construction industry has "lost its trump card",

"Housebuilding was more than just the one bright spot against the increasingly dark backdrop – it had taken on a totemic importance as a beacon of demand, resilience and hope," he said.

"Without it, the sector looks dangerously exposed. Not for nothing is construction is now suffering the highest number of new insolvencies of any industry.

"The slump in output is the worst for six years, as the industry has been hit for six by a toxic combination of weak confidence, softening investor demand and rising input costs. Despite the low interest rate environment and abundance of finance available, developers are increasingly doubling down - concentrating on completing existing projects rather than commissioning new ones.

"Nevertheless it's wrong to draw parallels with the painful slowdown seen at the start of the decade. For all the fall in demand, access to finance has never been better and order books remain strong outside London.

"Yet at this rate there is likely to be more pain to come, as there is little sign of an end to the limbo which is prompting investors in London and the southeast to sit on their hands."

(LM/MH)