Nearly one in three building companies (30%) are expecting their workloads to fall this year, according to the latest state of trade survey from the Federation of Master Builders (FMB).
However, this figure was a marked improvement on the 44% of respondents with negative expectations in the final quarter of 2009, but a majority of firms continued to report lower workloads.
More than half (56%) of FMB members have seen a reduction in the amount of private sector housing work in the first quarter of this year.
There has been an abrupt slowdown in the amount of public sector work, with 51% reporting lower workloads compared to 31% just three months ago.
Some 55% of companies said they were not expecting to take on any new staff over the next six months.
However, there were some encouraging signs, with sentiment improving across many sectors in the first quarter of 2010, and the outlook for the coming quarter also more optimistic.
Richard Diment, director general of the FMB said: "The results from our latest state of trade survey show that the building industry in still in recession. What is particularly alarming is the slowdown in the amount of public sector work. What this shows is that cuts in local authority budgets are already hitting a hard pressed building industry and future prospects after the general election do not look good.
“Prospects for employment in the construction sector are also not good. We are now in serious danger of repeating the mistakes of the last recession in the early 1990s when thousands of young people were denied the opportunity to learn a trade with the result that the construction sector suffered a serious skills gap when it did emerge from the recession in the mid 1990s.
“The building industry is a vital part of the British economy responsible for 9% of the UK’s Gross Domestic Product but unless the political parties do more to speak up for our industry its contribution to the economy both in terms of wealth and job creation will be diminished.
"As the political parties gear up for the general election we need to hear more about what they will do to support British builders who face a very uncertain future. A commitment to skills and training would be a start as would cutting the amount of growing regulation that small building firms have to cope with.”