But ONS figures reveal sector did grow 1.3% over the previous 12 months

The construction industry contracted by 0.5% in the final quarter of 2011, figures from the Office for National Statistics (ONS) have revealed.

The contraction follows growth of only 0.3% in the third quarter of the year. However, there was still growth of 1.3% between the fourth quarter of 2010 and the fourth quarter of 2011.

The sector was the second worst performing in the UK in the last quarter behind manufacturing which contracted by 0.9%. The UK economy as a whole saw a decline in gross domestic product of 0.2% over the period.

James Hastings, head of construction futures at analyst Experian, said: “I would have said this is a lot better than we were expecting. We were expecting a deeper downturn.”

However, Noble Francis, economics director at the Construction Products Association, said: “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.”

The chancellor George Osborne said the figures were disappointing.

He said: “Britain has substantial economic problems, and debts built up over the last ten years.  We’re dealing with those, but the truth is, dealing with those problems is made more difficult by the situation in the eurozone.”