The construction industry endured a soggy and sluggish start to the year, with official figures showing output continued to slide in the three months to January as wet weather and weak business confidence hit activity.

Total construction output is estimated to have fallen by 2% over the three-month period, reinforcing concerns that the industry entered 2026 on the back foot.

The downturn was driven mainly by a drop in new work, which fell 3.2% over the period, while repair and maintenance activity edged down by 0.4%.

Poor private house building activity proved the biggest drag on the sector, with output dropping 6.3% across the three months.

Overall, seven of the nine construction sectors recorded declines, underlining the broad weakness in workload as developers and clients delayed decisions amid uncertain market conditions.

Private commercial was the only new work sector to record growth (2.2%) with the difficult to measure private RMI sector also showing an uplift.

Industry sources said a run of heavy rainfall at the start of the year has compounded already fragile confidence, disrupting site productivity and delaying programmes on many projects.

Despite the gloomy three-month picture, January itself showed a marginal improvement.

Monthly construction output edged up by 0.2% following three consecutive monthly declines.

The small rise came entirely from repair and maintenance work, which increased 3.3% during the month as contractors focused on indoor works and maintenance jobs less affected by poor weather.

New work activity continued to fall in January, slipping 2%, suggesting developers remain cautious about starting major schemes.

The figures highlight the difficult conditions facing contractors at the start of 2026, with house building particularly weak and many clients holding back new projects while waiting for clearer signs of economic recovery.

Clive Docwra, managing director of property and construction consultancy McBains, said: “It’s clear from today’s figures that investor appetite for major projects remains weak, with new work falling by two per cent in January, and the longer-term picture over the three months to January showing a similar fall in output.

“Particularly concerning is the work in seven in nine work sectors going backwards, and especially the 6.3% fall in new housing, which is one of the sharpest drops in recent years.

“The worry, of course, is that along with an already fragile economic climate, the Middle East crisis will impact construction by driving up material costs and disrupting global supply chains, so the outlook for 2026 is already looking bleaker than expected.”