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Activity in Britain’s construction sector last month was weaker than it has been for seven years, with housebuilding hit hardest.

The Markit/CIPS survey of purchasing managers fell to 46 in June — the 50 mark separates an expansion in activity from contraction — markedly down from the 51.2 recorded in April.

Tim Moore, senior economist at Markit, said trading conditions were always going to be challenging in the run-up to the UK’s vote on EU membership because of uncertainty about the outcome.

“However, the extent and speed of the downturn in the face of political and economic uncertainty is a clear warning flag for the wider post-Brexit economic outlook.” Markit said 80 per cent of the survey was conducted before the vote.

Howard Archer, chief UK economist at IHS Global Insight, said it was an absolutely dire survey, adding that a contraction in the industry now looks inevitable.

Housebuilding was the hardest hit sector, with activity falling at its fastest pace since 2012.

The pain for housebuilders has intensified since the referendum. Share prices of big housebuilders such as Taylor Wimpey, Barratt and Persimmon have all dropped since the UK voted to leave the EU, as the market has responded to fears the economy will slow, hitting transaction volumes.

Markit reported that civil engineering activity was stable but commercial building work had lost momentum. For big civil engineering projects, most of the work currently taking place relates to contracts signed a number of years ago.

Mark Robinson, chief executive of built environment firm Scape Group, said it was essential that the government continued to push through big projects such as HS2 and the trans-Pennine rail project “to ensure a sustainable pipeline and to stimulate economic growth for years to come”.

Noble Francis, economics director of the Construction Products Association, said his members were reporting that projects already started — particularly in big cities such as London, Birmingham and Manchester — were continuing.

“But as smaller projects have been completed, the uncertainty before the referendum has had an impact on new contracts signed,” he said.

A number of big commercial property deals have already fallen through in the aftermath of the result and Foxtons, the estate agency, has issued a profit warning.

Policymakers fear businesses will delay spending decisions until there is a clarity on Britain’s future relationship with the EU.

Bank of England governor Mark Carney signalled last week that the central bank is prepared to take action, such as cutting interest rates, to maintain confidence and growth.

The BoE’s financial stability committee will report on Tuesday about what it intends to do to support the banking system.

It wants to ensure that credit continues to flow to businesses and households and that the banking system remains stable.