BALI technical director Neil Huck said some contractors have had their forward-order books slashed by 50 per cent.
"Housing seems to be really seriously affected and lots of sites have been put on hold," said Huck.
The construction slump has resulted in losses for several major building firms including Bovis, Barratt and Persimmon, which made 1,000 job cuts at the beginning of July this year.
Huck added that while grounds maintenance contracts have not been so badly hit, the sector was feeling the shockwaves from cost-cutting measures, which could continue for the next two years.
"Some local authorities are looking at reduced frequencies of maintenance visits; for example, they might do seven (grass) cuts a year instead of eight," he warned.
"Clients are going to be expecting more for their money; grounds maintenance and landscaping has to be done but both central government and local authorities are looking for savings on their contracts."
Environmental support services firm Fountains, which employs 800 staff, has announced it now expects to fall significantly short of market expectations because, despite retaining its customer base, orders for work are being delayed.
Fountains chief executive Richard Haddon said the area he had observed as facing a particular downturn was rail.
"People are looking very carefully at their budgets and that is a general trend, but we've seen a particular downturn in rail," he said.
"We are just not seeing the same amount of work to bid on. We are not rushing into full-blown cost-cutting as far as employees are concerned, and we would be foolhardy to let good-quality staff go."