Skanska UK's turnover has plunged to £628m for the first half of 2010, a fall of 24% on the figure of £821m posted for the same period a year ago.
Revenue for the second quarter dropped to £320m (Q2 2009: £445m).
Skanska's UK order book was down from £1,326m a year ago, to £952m.
However, operating margin rose to 2.4%, compared to 1.9% in the first half of 2009.
In an announcement to the Swedish stock exchange, the global construction giant warned of the impact of the looming public spending cuts in the UK.
“In the U.K., the Czech Republic and Slovakia, we are seeing the effects of cuts in public spending, which will probably result in reduced public construction investments,” said president and CEO Johan Karlström.
He added: “The volume of public-private partnership (PPP) projects in the United Kingdom has weakened because of uncertainty due to the British budget situation.”