The July reading dipped below the neutral 50 mark for the second consecutive month as the index registered 45.9 compared to 46 in June.

The latest reading signalled the fastest overall decline in construction output since June 2009 following the steepest fall in commercial building for over six-and-a-half years and a drop in civil engineering activity for the first time in 2016.

But there were also reports suggesting that demand patterns had been more resilient than expected, and some firms linked new enquiries from international clients to exchange rate depreciation.

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI, said: “July’s survey is the first construction PMI compiled entirely after the EU referendum result and the figures confirm a clear loss of momentum since the second quarter of 2016, led by a steep and accelerated decline in commercial building.

“Reduced volumes of new work to replace completed projects contributed to a fall in employment for the first time in just over three years.

“UK construction firms frequently cited ongoing economic uncertainty as having a material negative impact on their order books.

“In particular, survey respondents noted heightened risk aversion and lower investment spending among clients, notwithstanding a greater number of speculative enquiries in anticipation of lower charges.

“Meanwhile, exchange rate depreciation resulted in sharper input cost inflation and there are concerns that additional supplier price rises for imported materials could be around the corner.

“However, it’s not all bad news, at least in so far as the decline in construction output was little changed from June’s seven-year low.

“There were also some reports that demand patterns had been more resilient than expected given the uncertain business outlook.

“Reflecting this, new order volumes and purchasing activity both dropped at a slightly slower pace than in the previous month.

“Construction firms generally suggested that clients had adopted a wait-and-see approach rather than curtailed or cancelled forthcoming projects during July.

“While there is little to suggest an imminent turnaround in business conditions, a relief factor appears to have softened the fall in business optimism among UK construction companies.

“Latest data showed that confidence regarding the year-ahead outlook eased further following the EU referendum, but only to a level last seen in April 2013 and one that is still well above the record lows.”

Will Waller, Market Intelligence Lead at Arcadis, said: “Despite the disappointing value, as the first PMI score fully capturing a post-referendum timeframe, for some the result will not be as bad as feared with the decline in sentiment slowing compared to last month.

“However, the drop across the sub-sectors clearly confirms that uncertainty is playing out through delayed decision making, with many procurers re-evaluating their timing and approach.

“Whilst there is little unequivocal evidence of permanent project cancellations at the moment, providing some hope, the coming months will likely indicate how long we can expect the uncertain environment to persist and therefore the longevity of the related impacts on the construction market.”