UK construction firms noted a general slowdown in market conditions last month with the May reading falling to 51.2 from 52 in April.

The data also signalled an outright reduction in new order volumes for the first time since April 2013.

“Anecdotal evidence pointed to a general lack of client confidence, driven by heightened uncertainty about the economic outlook. Moreover, a number of firms noted reluctance among clients to place orders and commence contracts until after the EU referendum,” the report stated.

However, there were signs that construction companies remain relatively upbeat about the growth outlook, with more than half of the survey panel (51 per cent) expecting a rise in output over the next 12 months and only one-in-seven (14 per cent) anticipating a fall. As a result, job creation picked up in May and reached a four-month high.

David Noble, group chief executive officer at the Chartered Institute of Procurement & Supply, said: “The sector appeared to have taken residence in a waiting room of non-activity, as continuing poor global economic conditions and uncertainty around the EU referendum impacted growth and new orders.

“The chink of light appeared to be the industry’s optimism for the future and an indication that that this may be a short-term situation as employment continued to rise to a four-month high and job creation has been continuous for three years

“Once again the industry holds its breath to see what the coming months will bring as housing sector growth in particular remains weak.”