The latest monthly construction data from the Chartered Institute of Purchasing and Supply shows the first decline in January for 10 years

According to the report, January registered an index figure of 34.5 compared with 53.9 in the same month in 2008. Although it was up from 29.3 in December 2008, the last time it dropped below 50 in January was in 1999.

Five indicators are included in the measure – such as new orders and output – and an index reading above 50 indicates an overall increase, while below 50 denotes a fall.

Roy Ayliffe, director of professional practice at CIPS, said: “Although Q1 opened with confidence among purchasing managers in the UK construction sector, it remained very subdued in comparison to historic data. This probably reflects the exceptional weakness of previous months more than any significant easing in the rate of contraction.”

The housing sector was the worst affected, rising from a figure of 23.8 in December to 26.9 in January, compared to a figure of 48 in 2008.

The CIPS report said: “The weakest sector was again housing while civil engineering (37.8) continued to display the most resilience to the poor business environment.”

Despite the gloomy news, confidence was at its highest level for seven months. The figure was 55.3 compared to 48.1 in December.