Grim figures from Glenigan show starts fell by 29% compared to the same period in 2009.

Glenigan economist James Abraham said: “Extreme weather conditions exacerbated the seasonal lull combined with the slowdown in government investment resulted in one of the lowest monthly total project starts in years.”

Residential projects were 31% down, non-residential 20% down and civil engineering 50% lower than the same period a year ago.

Glenigan is forecasting that construction projects starts will fall by 7% this year compared to 2010 following a 6% year on year increase in the value of starts from 2009 to 2010 that was primarily fuelled by the private sector.

Private housing, industrial, office, retail and civil engineering projects starts are expected to grow this year, while social housing, hotel & leisure, education, health and community & amenity project starts are forecast to decline.

Allan Wilen, economics director, Glenigan said: “The impact of planned Government investment cuts is clear with only rail avoiding the axe and increasing private sector confidence not quite strong enough to counter Government cuts.”

Office developments will see the strongest growth of 41% year on year as developers respond to increasing demand from tenants plus rising capital and rental values, particularly in central London.

Wilen said: “Little new floorspace came onto the market in the recession and the shortage of quality office space will worsen as the recovery gathers momentum.”

Strengthening UK manufacturing, improved investor confidence, rising property capital values and a fall in available floorspace will boost industrial construction project starts by 29% year on year. The sector was hit particularly hard by the financial crisis and economic recession with project starts falling 60 per cent over the last three years.

Retail construction is forecast to increase 4% year on year following a very strong 2010. The major supermarkets will continue to expand throughout 2011 with retailers and landlords expected to increasingly refurbish existing premises in an attempt to increase footfall and consumer spending.

The hotel & leisure sector will see a 24% year on year decline in new construction project starts as the 2012 Olympics related boom seen in 2010 fades with the majority of Games related projects now underway.

Abraham said: “The fall in Government investment since the start of the financial year has already had a negative effect on the value of construction projects starting on site, most strikingly in the health sector.

“Project starts in the education, social housing and community & amenity sectors are all forecast to fall by over 25% year on year having held up relatively well in the Autumn.”