The Chartered Institute of Purchasing and Supply said that its construction purchasing managers' index dropped to 38.8 in June compared to 43.9 in May. It was the biggest drop since the survey, covering housing, commercial and civil engineering sectors, began in April 1997. A figure of 50 represents growth.

The CIPS housing activity index fell from 32.7 to 25.6 - also the lowest reading on record.

Commercial activity also fell last month from 43.6 to 41.1 while civil construction went down to a new record low of 40.0, from 52.5 in May.

The construction sector has been among the worst affected by the recent economic slowdown, with borrowing harder to come by as a result of the credit crunch and soaring raw materials costs taking its toll.