The latest ONS data states output was 0.4% lower compared with last year, while new orders in Q2 fell 7.8% and 12.6% compared with the same period in 2016.
ONS has attributed the decrease in new orders from falls in both all new housing, which fell 4.9% and all other work, which fell by 9.0%.
Rebecca Larkin, Senior Economist at the Construction Products Association, said new orders in construction have hit their lowest level since Q1 2014.
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"In particular, the sectors suffering the largest falls were the industry's largest three; private housing, commercial and infrastructure.: private housing, commercial and infrastructure," she said.
"Commercial new orders began tailing off in the second half of 2016 and are 11.2% lower since the EU Referendum. Whilst this downward trend was expected amid the rising uncertainty giving way to a reluctance to invest in new offices space, private sector house building and infrastructure are the key drivers of growth in the CPA's forecasts for 2018 and 2019.
"New orders in these key sectors were the lowest since 2015 and highlight that there are now lower volumes of work queued up in the pipeline.
"Nevertheless, for the year to date, construction output is still 1.3% higher than a year ago. The weakness in new orders is factored in to the CPA's forecasts for 2018, with construction growth slowing to 0.7% as activity on projects reaching an end is not replaced at the same rates."
(LM)
