The total value of projects starting on site in the three months to November dived 14% compared to the same period last year, according to new figures from construction information specialist Glenigan.

Falls were expected in government funded projects after the spending review, but slides in private housing and retail projects is a worrying development for firms’ banking on these areas to tide them over.

But Allan Wilen, economics director at Glenigan, predicted the fall in retail work will be short lived and will recover next year to become a valuable construction bright spot along with office and rail work.

“The major supermarkets have led retail project growth this year and this is set to continue in 2011,” he said.

“Retailers and landlords are also expected to increasingly refurbish premises to increase consumer footfall and spending.

“Major new shopping centre projects will take longer to emerge, although work is continuing on Westfield’s Stratford City project and work has restarted on the Trinity Quarter scheme in Leeds.”

He also believed that the recovery in commercial building taking hold in London will begin to spread to other regions as developers dusted down old schemes.

“New office projects fell sharply during the recession and hence little new floor space has come onto the market.

“In central London demand, capital and rental values have been rising and the shortage of quality office space will worsen as the economy recovers.

Developers such as Land Securities are already pressing ahead with major projects such as the £500m ‘Walkie-Talkie’ building in the City of London,” added Wilen.

He added: “The Department for Transport’s capital budget over the next five years will broadly match that of last five.

“Rail investment will take a growing share at the expense of areas such as roads with numerous projects to increase network capacity and improve station facilities including high profile projects such as Crossrail and Thameslink.”