The forecasts point to little more than 147,000 new housing starts in Great Britain this year, a fall of 27% from the levels in 2007 and the smallest number since 1945.

Private sector housing starts are forecast to be down by 30% to the lowest level since 1992,whilst the social housing programme is failing to grow in line with government’s plans for 45,000 new homes a year by 2011.

The forecasts for the whole of the construction industry show that the previous expectations that the industry would grow in 2008 have now been reversed and output is expected to decline by 1.3%. Prospects remain good for construction work on infrastructure projects, contracts are now being let for the major Building Schools for the Future programme, and work has started on building the Olympics projects.

Growth in these sectors is, however, more than outweighed by the decline in the housing market, a sharp fall in investment in new industrial buildings, and reduction in the repair and improvement to existing social housing.