While the public and businesses may have welcomed last week’s news that the UK economy is technically out of recession, the construction sector has continued to contract.

Construction output fell 2.5% in the three months from July to September.

The previous quarter saw a decline of 3.0%.

Output in August declined by 11.6% when compared to the same period in 2011.

But the biggest fall appeared in new work, which dipped by as much as 15.6% when compared to the previous year.

This fall came about as a result of public new housing and public other new work, which both fell by as much as 20%.

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Infrastructure and private new housing fell 18.4% and 12.1% respectively.

The news came as government statistics showed a rise of 1% in GDP.

Olympic and Paralympic ticket sales were given credit for adding 0.2% extra to the UK’s economic output.

Production industries were up 1.1% following a 0.7% decline in the second quarter.

Services rose 1.3% following a 0.1% fall.

Jonathan Hook, construction leader at PwC, commented on the statistics. He said: "The decline in construction output of 2.5% is disappointing but not unexpected.

"The industry is feeling the impact of cuts to the Government’s capital programme. Government has got the message about stimulating projects and the potential impact on economic growth and there are also increasingly positive signs from the private sector, but it will probably be a year before the sector starts to see growth again."

PwC chief economist John Hawksworth said: "Our own view is that we should continue to get a gradual upturn over the next year in the UK economy, provided that we do not get any major adverse shocks from the eurozone crisis or global commodity prices."

(IT)