The situation in the sector has been blamed on the slowdown in the housing market and the impact of the credit crunch.
According to RICS’ Construction Market Survey, 1 per cent more surveyors reported a rise than a fall in work in Q1 2008, compared to 16 per cent in Q4 2007.
The report also revealed that growth in private housing had turned negative for the first time since 1999, with a downturn in the North and static growth in London and the South East, the Midlands, Wales and Northern Ireland.
This trend was expected to continue, according to RICS, as confidence among builders that workloads would increase fell for the fifth quarter in succession.
All this, the body believed, would make government targets of adding three million new homes to the housing stock by 2020 much more difficult to achieve.
David Stubbs, senior economist at RICS, admitted that a slowdown in the market had led to a reduction in properties being built, going against government plans which called for three million new homes in the next 12 years.
He said: “Growth in the construction industry has slowed abruptly in the first quarter of this year. Private residential workloads are now shrinking as home builders react to challenging conditions in the housing market by reducing the number of new homes under construction.
"This emphasises the difficulty that the government will have in encouraging higher house building levels during periods when the housing market is soft.”
Richard Sexton, business development director at e.surv, suggested that demand would mean that properties would still be built, albeit at a slower rate than anticipated.
He said: “This is the exact opposite of what the government was hoping for. Events have conspired against it and the credit crunch has impacted in many ways. Over the next 12 months, there will be a definite depression in the number of new developments and lenders will continue to be cautious on lending on new builds.
"It will all be about the size of the effect but I suspect that new build prices will drop more than any other sector. Despite this, there has got to be an increase in house building as demand will continue to grow.”
