The latest data shows that new work and repair and maintenance both fell by 2.6% and 1.5%, respectively.

Seven out of the nine sectors fell in Q4 with private new housing as the main negative contributor to the decrease, which fell by 3.6%.

Monthly construction output is estimated to have fallen by 0.5% in December, following an upwardly revised decrease of 0.8% in November and a downwardly revised decrease of 1.6% in October.

The decrease in monthly output in December 2025 came solely from a decrease of 2.5% in repair and maintenance, as new work grew by 1.0%.

Annual construction output increased by 1.8% in 2025 compared with 2024, representing the fifth consecutive year of annual growth.

The annual rate of construction output price growth was 2.7% in the 12 months to December.

Data also found total that construction new orders fell by 3.8%  (£469 million) in Quarter 4 2025 compared with Quarter 3 2025.

The quarterly decrease came mainly from private commercial new work and private industrial new work.

Pegasus Group senior economics director Richard Cook says: “Yet another decline in construction output for the third consecutive month is a concerning trend that the Government cannot afford to ignore.”

“Whilst outputs can fall in December due to a slow holiday period, the continued declines we have seen over the past few months should be a cause for concern.”

“The fact is that persistent issues around skills shortages, an ageing workforce, and a slow-moving planning system are all continuing to hamper growth in the construction industry; failing to address these will set back the UK’s economic growth too.

“The Government has taken a proactive approach to address these problems: for instance, changes to the NPPF and new announcements this week to create more construction apprenticeship and T Level opportunities in education estates – which will develop talent with transferrable skills for the wider sector – will be vital in reversing the decline.”

“However, the deep-rooted issues affecting construction outputs cannot be reversed overnight: the Government’s measures will take time to create real change.”

“More needs to be done to address the immediate problems the sector is facing and reverse the decline in output as soon as possible.”

Hampshire Trust Bank managing director of development finance Neil Leitch adds: “These figures underline what has been evident throughout 2025. It has been a disappointing year for housebuilding, characterised by a widening gap between ambition and delivery.”

“Developers want to build and demand from homebuyers remains clear, but the conditions required to move schemes forward with confidence are still not in place.”

“Recent data highlights the strain across the sector. Housebuilding remains the weakest part of construction, and the Home Builders Federation has warned that viability pressures are mounting.”

“Low approval levels, rising costs and policy burdens are combining to make it harder for builders to bring forward new schemes, particularly at a time when certainty and timing matter most.”

“The real issue is that delay does lasting damage. Each pause in decision-making erodes viability, reduces pipeline and weakens delivery capacity, especially among SME developers. For smaller and regional developers, that uncertainty is far harder to absorb, because prolonged delays directly constrain cash flow, site turnover and the ability to reinvest.”

“Improving output will require sustained investment in planning capacity and far greater consistency across the system. Developers need confidence that approvals will translate into starts and that delays can be managed realistically.”

“What is often overlooked is the time lag in development. Decisions delayed today will feed through into weaker output in the years ahead.”

“Without a renewed focus on delivery, confidence and consistency, the risk is that housing supply continues to fall short regardless of how strong the stated ambitions may be.”