The CPA said more than £32bn of construction activity had been lost since the beginning of the financial crisis in 2007, and predicted a fall in construction output of more than 1pc this year.

It forecast a 3.6pc fall in output for 2012, and zero growth in 2013.

"Although Government is committed to cut capital expenditure by 20pc over the next four years, the hoped for robust recovery from the private sector, to compensate for these cuts, is not materialising," said Michael Ankers, chief executive of the CPA.

He said both the commercial and housing sectors were performing badly, with a better outlook for infrastructure output which was being driven by increases in rail and energy related work.

Last year the construction sector grew by 8.4pc according to the Office for National Statistics, following a 2.7pc and 13.5pc fall in output in 2008 and 2009 respectively.

Mr Ankers said it was essential that the Government uses the Autumn Statement on November 29 to announce plans to stimulate recovery, otherwise the next few years will be "very bleak indeed" for the UK economy.

Source: Daily Telegraph