The Federation of Master Builders says the steepest fall in construction activity is a serious wake-up call that government announcements on construction have yet to be delivered.

Brian Berry, chief executive of the FMB, said: “The sharp downturn in construction activity undermines the Government’s stated ambition to deliver 1.5 million new homes and upgrade five million homes.

“Positive government policy reforms to speed up the planning system, introduce greater borrowing flexibility, and upskill the workforce are failing to unlock the much-needed momentum to drive economic growth. Delivery is key, so July’s plunge should set alarm bells ringing across industry and government."

The data highlighted marked decreases in work volumes across all three monitored sub-sectors, but a considerable drag came from a fresh drop in residential building.

UK constructors remain challenged by subdued demand conditions. The volume of new incoming work declined for a seventh month running in July, with the pace of contraction at its most pronounced since February.

Berry concludes: “To get Britain building again, consumers need greater confidence in the economy. Small building companies are very reliant on consumer confidence, which is why the prospect of further tax increases is such a concern. The proposed planning reforms announced in May need to be given absolute priority with a focus on fast-track approvals for sites of up to nine houses to help small building companies deliver the homes Britain needs."