The Royal Institute of Chartered Surveyors (RICS) said new orders in the industry had fallen by more than a third in recent months and were likely to fall further as confidence continues to erode.

According to RICS, advancing already planned construction and infrastructure projects will help to counter the sharp drop in activity in the construction sector.

Government statistics show that the number of people working in the construction industry fell by 17,000, or almost 1%, between June 2007 and June 2008. However, RICS estimates that construction employment could fall by around 14% peak to trough -around 300,000 job losses - unless some action is taken. That would be a repeat of the problems faced in the early nineties when, between Q1 1991 and Q2 1993, the number of people employed in the industry fell by 342,000 from 2,236,000 to 1,894,000.

After the 1990s downturn, it took until 2001 for construction output to return to pre-recession levels.

To address this issue RICS is calling for the Chancellor to use the Pre-Budget Report to announce additional funding for major projects to help retain skilled workers in the construction industry.

RICS wants the Government to bring forward plans to renovate schools in England, upgrade railway improvements, build new hospitals and houses and reconsider shelved transport schemes in cities including Leeds and Liverpool.

RICS chief economist, Jennifer Welch, operations director for the North said:

"The economic downturn will hit construction professionals, including Quantity Surveyors and Project Managers, plasterers, bricklayers and carpenters.

Bringing forward capital funding for vital projects will have the advantage of delivering much needed housing and infrastructure but will also go someway to preventing an employment crisis in the industry. As the UK enters a recession it is essential that skills are not lost to the construction sector as people leave and retrain to take up other jobs."