The data from the Office for National Statistics (ONS) showed that construction output dipped 0.2 per cent in September, after a sharp 3.4 per cent decline in August and against expectations for a modest rise.
On an annual measure, output dropped 1.6 per cent in September, the biggest decline for more than two years.
For the third quarter as a whole, new housing construction slumped 4.3 per cent, its biggest decline in just over three years, reflecting a drop in housing starts in the previous quarter around the time of May’s national election.
On Thursday, the Bank of England’s chief economist Andy Haldane described the UK’s housing market as “broken”, highlighting the long-term lack of construction of new homes particularly by local councils.
Gordon Reid, business development manager for Kier Construction in Scotland, said other areas of the construction sector – about 7 per cent of the economy – remained buoyant.
“These latest ONS findings reflect what all those operating in the sector have long known: that challenges will continue to present themselves.
“However, while a downturn in residential housing can be attributed to this reduction, other sectors, like that of healthcare, have actively increased.
“Taking our own successes over the past few months as the marker, we fully expect these ONS figures to grow as we close 2015 and move into next year.”