Suggesting that consumer uncertainty would continue to drag down performance, builders' merchant Travis Perkins maintained a bearish stance on prospects of a quick recovery in demand in the UK's construction and DIY sectors.

Analysts called the decline a "horrible start to the year", as shares in the builders' merchant fell by more than 5pc to 710p on Wednesday.

Geoff Cooper, chief executive, said, “Our markets appear to have stabilized following a sharp decline at the start of the recession. However, much uncertainty remains about the condition of the UK economy and the prospects for construction markets”.

“At this stage there is no clear indication of when our markets might return to growth. Although we believe this might be evident by the end of 2010, we are also wary of the probable 'false starts' that we expect to see”, he said.

Mr. Cooper added that he was "looking for stability or a slight improvement" in aggregate performance this year ahead of an expected upturn.

The company said it will not pay a dividend because of the uncertainty.

Mr. Cooper added, “Whilst our markets no longer exhibit the abrupt declines in volume that characterized the start of the recession, activity levels remain fragile”.