The Construction Products Association’s (CPA) latest forecast predicts construction ouput will fall by 6.3% this year and a further 1.4% in 2013 before returning to growth in 2014.

Meanwhile, the Federation of Master Builders’ (FMB) new state of trade survey shows 39% of respondents reported a decline in private new housebuilding workloads during the third quarter and 40% predict a further decline in the last three

“Although growth is expected in 2014, the next 12-18 months are likely to cause considerable pain to an industry that is already reeling from a prolonged decline,” said CPA economics director Noble Francis.

Other key predictions include this year’s total housing starts to be around 118,000; public sector construction work to fall 19% in 2010-2014; private sector construction work to fall 4% in 2012 but rise by 15% in 2012-2016.

The FMB said small and medium-sized builder workloads had fallen across the board in the third quarter, with 39% of firms reporting lower workloads in the private housing sector. Almost 70% of firms expect building materials costs to rise over the six months to March, a slight increase from three months ago.

FMB chief executive Brian Berry said the government must think carefully before imposing any new burderns on the housebuilding sector. “Real progress” on deregulation was needed, he said, though he was encouraged by the announcement of a business bank.

“This time last year we had hoped that we would be seeing at least some signs of recovery on the horizon by now,” said Mr Berry. “However, it is becoming clear that this situation is not going to resolve itself any time soon.”