Government number crunchers confirmed construction output fell 0.5% in the last quarter of 2011.

While the previous quarter was up 0.3%, there is widespread belief that with orders falling construction is inevitably heading for a technical recession of two falling quarters of output.

Forecasters have been warning from some time that weak private sector growth and collapsing public sector spending will mean a second construction recession following the credit crunch.

The latest quarterly figure is still an estimate, based on early returns of output figures in December, and may be revised again next month.

Overall UK GDP was down 0.2% in the last quarter raising pressure on the Government to stimulate the economy further in the next Budget.

The main drag on UK GDP was manufacturing down 1.2% and then construction.

Noble Francis, Economics Director at the Construction Products Association, said: “The GDP figures released today show that the final quarter of last year was extremely difficult for the economy, in which both construction and manufacturing had a significant effect.

“Unfortunately the prospects looking forward are even worse, as construction is expected to fall a further 5.2% during 2012, exacerbating the problems in an industry that has already lost 300,000 jobs, and severely hindering growth for the economy as a whole.

He  added: “Undoubtedly the problems in the euro zone have increased uncertainty in the private sector making investors highly risk averse to investment.

“However, this does not tell the whole story as Capital Investment from the public sector, which accounts for more than one-third of total construction activity, will have fallen 30% by the end of 2013.

“As construction has been highlighted by government as essential for recovery, the decline is severely harming prospects for the sector as well as constraining overall economic growth.”