Industry analyst Glenigan warned the wait-and-see approach taken by developers had contributed to an 11% fall in project starts during the three months to April.
The contraction in office, retail and industrial activity was the sharpest since December 2009, with the underlying value of project starts 21% lower than a year earlier.
Office starts fell by 50% compared to a year ago, with the retail and industrial sectors decreasing by 32% and 27% respectively.
Hotel and leisure remained in growth mode over the last three months along with private housing which edged ahead 4%.
In the public sector, education starts also contracted sharply, with universities appearing to delay schemes until after 7 May. The underlying value of starts of university projects plummeted from over £400m a year ago to under £100m during the latest period – the weakest quarterly total since the end of 2010.
This has dragged the value of education starts down by a third relative to a year earlier.
Allan Wilén, Economics Director at Glenigan, said: “We expect construction starts to spring back during the second half of the year, so long as a credible government is formed and the prospect of a second general election later in the year fades. This would mitigate the impact of the recent slowdown.
“Continued improvements in planning approvals add weight to the view that this is a pause rather than a permanent shift in market conditions.”