Contractors could be in for a roller coaster ride during the next five years with a 4% increase in output expected in 2013, followed by dips to 2% in 2014, 3% in 2015 and 2% in 2016.

Manual trades will be hit the hardest as the make-up of the industry changes while demand for construction managers will be greatest.

CITB predict that by 2016, demand for painters and decorators is expected to be 6,300 below 2010 levels, manual labourers 3,000 below and bricklayers 2,500.

The number of construction managers needed will be up 30,000 by 2016 on 2010 figures.

Judy Lowe, Deputy Chairman CITB-ConstructionSkills said: “The Construction Skills Network clearly shows that our industry is in for a tough time.

“Infrastructure investment, the first nuclear power plants and the revival of private housing will help, but the hard fact remains that despite an increase in growth from 2013 onwards, output and employment levels in construction will not have reached their 2007-8 levels by the end of the forecast in 2016.

“The sluggish return to growth means that we could be talking about a lost decade in construction and a loss of key trade skills. But, the real shock is the impact that cuts to public sector spending has had.

“The report shows that Public housing is set to fall by 25% this year, public sector non-housing by 24% and a further 10% fall is expected next year in both sectors.

“That’s a big deficit for other sectors of the construction economy to make up.

“Construction is an economically important industry – contributing 8% to GDP and employing 3 million workers in its supply chain.

“Construction has the potential to stimulate the economy and we are working with government to look for ways to return the UK to growth”.

In the regions and nations, there are mixed forecasts. The picture is positive for London and the South East – which accounts for 60% of employment growth.

After a dramatic period of decline, Northern Ireland is set to grow 2.1% over the 5 year period, well above the UK average of 1.4%.

In Scotland, growth remains second only to London – whilst Wales continues to deliver higher than average growth results.

In other English regions, particularly in the North West (-0.9%) and West Midlands (-1.1%) forecasts show a period of declining output, as major Building Schools for the Future projects come to a close.

Beyond this year and the early part of 2013, overall construction starts to improve and grow steadily.

Despite this growth, by 2016 output and employment will still be 5% below their respective 2007/8 peaks.