The Federation of Master Builders’ (FMB) latest State of Trade Survey of its members in the first quarter shows the net balance of residential workloads was -23%, compared to -15% in the final quarter of 2012.
FMB chief executive Brian Berry said the bleak picture followed an encouraging final quarter of 2012 which suggested the industry was turning a corner.
He said rising costs and tough credit conditions also persisted, while about 30% of firms surveyed had shed staff in the first quarter.
"Our members have for years eaten into their own profit margins in a bid to maintain capacity – but that cannot continue," said Mr Berry.
"We urgently need to see a cut in VAT from 20% to 5% on home renovation and repair, as householders simply can’t afford to get work done to make their homes more comfortable, affordable and energy-efficient."
He said the FMB’s figures also showed workloads in the public residential sector have fallen at an alarming rate.
"This should be a wake-up call to government at all levels to attend to the country’s dilapidated social housing stock. Local authority borrowing caps must be raised or axed altogether to help fund the building of new energy-efficient social housing and bring existing homes up to scratch," said Mr Berry.
