While a drop in infrastructure activity dampened new work activity, a strong year of private home and non-housing repair and maintenance work compensated for the contraction and lifted construction output overall by 0.4% in 2024.

New orders in the fourth quarter of the year were also lacklustre slipping by 2.4% against the previous quarter.

But there was positive news from private housing, which is the largest subsector of the industry.

Orders surged by 24% in the last three months of the year, as residential developers who had delayed projects in the autumn decided to move forward with previously paused schemes.

Commercial property builders also finished the year on a positive note, with the value of commercial orders in the final quarter rising by 15% compared to the same period in 2023.

Gareth Belsham, director of Bloom Building Consultancy, warned there is still concern about industry momentum.

Belsham said: “The fact that the Q4 slowdown in orders coincided with the Chancellor’s bearish Budget will make awkward reading in 11 Downing Street, but the decline began long before that. New orders shrank by nearly a quarter in the third quarter, suggesting that the fragility of business sentiment has deeper roots.”

Looking ahead he said: “The industry has begun 2025 finely poised. The Chancellor is making all the right noises about construction being an engine of wider economic growth and the prospect of falling interest rates will make it easier for developers to buy land and get building.

“For all the momentum, business sentiment is patchy and developers, landlords and investors are laser-focused on value and proceeding with caution.”

Clive Docwra, managing director of property and construction consultancy McBains, said: “The recently published planning reforms and falling interest rates will hopefully inject new momentum into the house building sector, although skills shortages, cost inflation on materials and a sluggish economy could still have an impact on significant growth across work sectors.”