According to the latest ONS figures, both new work and repair and maintenance fell by 3.2% and 0.4% respectively over the three-month period.

Seven out of the nine sectors saw a decline in the period, with the main negative contributor to the decrease being private new housing which fell by 6.3%.

Despite the quarterly drop, monthly construction output grew by 0.2% in January 2026 following three consecutive monthly falls.

The rise in monthly output came solely from an increase in repair and maintenance, which grew by 3.3% as new work fell by 2%.

Terry Woodley, manging director of development finance at Shawbrook, commented: “Despite subdued expectations, the construction sector has started the year with a small, but welcome increase in output.

“Repair and maintenance stood out as the main contributor to this increase, potentially reflecting continued efforts to support housebuilding and address planning system constraints.

“Looking ahead, activity is expected to remain modest.

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“The annual construction output increased by 1.8% in 2025 compared to 2024, making it the fifth consecutive year of annual growth, which is a testament to the sector’s resilience.”

Simon Dekker, senior relationship director at Paragon Development Finance, said: “Today’s construction output figures show a broadly flat market, with new housing still under pressure while infrastructure and public sector work bringing most of the demand.

"For the hundreds of SME developers we work with, the biggest hurdle remains an unpredictable and slow planning system. That’s why National Planning Policy Framework (NPPF) reforms proposed towards the end of last year were a welcome step forward.

"In our consultation response, we urged the government to require councils to review and release underused public land to create a stronger pipeline of small and medium-sized sites, and to streamline permission in principle so SMEs can secure early certainty without excessive upfront cost.

"These practical changes would materially reduce planning risk, restore confidence for lenders and improve viability for smaller developers.

"We hope the final NPPF incorporates these measures to help build momentum and a more reliable, proportionate system which enables smaller housebuilders to deliver high-quality homes at scale.”