The pessimistic outlook comes in the latest trade survey by the Federation of Master Builders.

The figures show repair and maintenance specialists are among the gloomiest sectors as doubts increase over the future of the Government’s Green Deal initiative.

Construction SMEs have now suffered falling workloads in each of the last 16 consecutive quarters.

Brian Berry, Director of External Affairs at the FMB said: “The disastrous results for the RM&I market are very alarming given that the Government will be launching its Green Deal home improvement initiative in October.

“Market conditions in the building industry haven’t been this bad since the first quarter of 2009. Clearly, robust incentives for householders are needed if the Green Deal initiative is to succeed in a depressed market.

“50% of FMB members responding anticipate workloads falling still further in the coming quarter compared to 33% in Quarter Three of 2011.

“This indicates that the increasingly uncertain outlook for the economy and more downbeat prospects for employment may lead to a retrenchment in consumer spending, particularly on discretionary items such as non-essential RM&I work.

“Although the Green Deal has no upfront financial costs the Government needs to accept that it is still perceived by householders as a debt and there is no appetite for more borrowing amongst householders already worried about meeting existing commitments.

“If the Government’s Green Deal initiatives is to succeed in its ambition to retrofit 14 million properties by 2020 then it will need to provide householders with additional financial incentives such as a reduced rate of VAT or lower Stamp Duty.”