The construction industry endured a difficult final quarter of 2012, due to declining output and orders and rising costs.
The results of the latest Construction Trade Survey, published today, show the bulk of the industry still faces a very difficult year ahead.
Companies down the supply chain are experiencing a contraction in workload exacerbated by difficulties in late payment.
Large firms, especially those working in the infrastructure sector, have reported improving conditions.
The survey found that 23% of building contractors reported that, on balance, output fell in the private commercial sector, whilst in private new housing output flatlined.
46% of contractors reported falls in the profit margins; 62% of contractors said their orders fell in Q4 and 43% of large and medium sized building contractors said tender prices were reduced.
Noble Francis, Economics Director at the Construction Products Association said:
"It was good to see a rise in construction output for Q4 compared to Q3, when activity was adversely affected due to the Olympics and Paralympics.
"However, output remains 9.3% lower than a year ago, and this is reflected in the Construction Trade Survey.
"A minority of firms working on energy and rail projects continue to thrive as do construction product manufacturers who are able to export outside the EU.
"Yet, overall, the industry continues to suffer falls in work across both public and private sectors."
In 2013 is expected to face more difficulties, with declining orders and enquiries across the industry.
Julia Evans, Chief Executive of the National Federation of Builders, said:
"The construction industry is braced for a year in which weak demand and higher costs will create a very challenging trading environment.
"As the Government and industry collaborate to lay out a long-term strategy for the industry, we must not lose sight of the need to maintain the current capital investment plans that will generate economic growth in the more immediate future.”