The Federation of Master Builders called for a VAT rate cut yesterday after new figures showed a bigger-than-expected drop in construction output.
Data from the Office for National Statistics showed output fell by 2.8% in February as adverse weather affected building sites across the country.
The month-on-month drop was the second setback for the industry in recent months after a 4% output decline in November.
Economists yesterday said it was likely that activity in the sector rebounded strongly last month, but FMB chief executive Brian Berry said the industry was still in need of a helping hand.
“The latest ONS figures show there is no room for complacency about the state of the construction industry, but they do at least give cause for optimism,” Mr Berry said.
“The results for the FMB’s State of Trade Survey for the last quarter of 2013 showed a positive net balance among Scottish firms for the first time since the first quarter of 2008.
“The fall in output in February is clearly something of a blip, with very wet weather conditions playing a major role, and the longer run trend remains positive.
“However, growth of 0.3% in the three months to February is moderate, to say the least, and particularly worrying is the continued decline we are seeing in housing repair and maintenance.
“This is a sector in which the majority of SME construction firms work.
“It is key to job creation, and often a weathervane of consumer confidence,” he added.
“The Westminster Government should act now by using the power it has to levy a reduced rate of VAT on housing repair and renovation.
“It would make economic sense and could secure the still tentative recovery we are seeing.”
The impact of February’s construction figure is unlikely to have too much bearing on GDP for the first quarter of this year, with growth of 0.8% expected when figures are released later this month.