There have been further falls in construction levels in the UK economy, according to the Office for National Statistics (ONS).

The figures reveal the total volume of construction output in the second quarter of 2008 fell by 0.5 per cent compared with the first quarter of 2008.

New private housing work led the way downward, seven per cent lower over the period, with new public housing down two per cent.

All new work fell by three per cent, while repair and maintenance rose by two per cent.

However, in the longer-term the picture is slightly less grim.

The ONS finds the total volume of construction output in the 12 months to the second quarter of 2008 rose by three per cent compared with the previous 12 month period.

The news supports the findings of Chartered Institute of Purchasing and Supply (CIPS) and Markit, which earlier this week reported the industry contracted for a sixth month in August at close to the fastest pace in at least 11 years.

With a reading below 50 indicating a contraction, the UK's building industry - which accounts for six percent of the economy – recorded a figure of 40.5, compared with 36.7 in July.

This is lowest since the survey began in April 1997, the London-based agency said.

Homebuilders Taylor Wimpey Plc and Bovis Homes Group Plc have posted losses and shed workers after U.K. banks pared lending, starving the housing market of buyers.