Commercial construction activity for the 2016 calendar year fell to £16.7bn, down 14.1 per cent on the previous period, according a new report by JLL, the property services company.
The reduced work is a result of lower numbers of new build developments, which are down 18.1 per cent quarter-on-quarter, while refurbishments are 6.8 per cent lower on the quarter.
In London, construction declined quarter-on-quarter but rose 2.7 per cent compared to the same period a year ago.
Construction started at 22 Bishopsgate in London will provide a total of 1.3 million square feet of office space, and is scheduled to be completed in 2019.
The 70,000 sq ft office refurbishment of 33 Gutter Lane, near St Paul’s, also commenced in the fourth quarter with completion scheduled for the second half of the year.
At a sector level, activity in the hotels sector reached £2.5bn, up 2.4 per cent quarter-on-quarter, the second in a row.
JLL said further depreciation of the pound against the dollar and euro is likely to be good news for the hotel industry, with the UK now a more affordable place to visit.
Other sectors such as healthcare continued their upward trajectory.
Activity within the medical and healthcare sector for the 12 months to the end of December reached £2.1bn, up 7.7 per cent quarter-on-quarter.
Looking ahead, ongoing economic volatility will influence business nd consumer confidence, access to finance and views on risk, which may result in a decrease in new speculative project development start dates.