The Federation of Master Builders has that the construction industry could see 90,000 people made redundant in the first half of 2009.
The body has polled its members on redundancies, finding that over half of its members are set to make people redundant in the first half of 2009.
The FMB said this would mean 90,000 job losses in the industry if extrapolated across the entire construction SME sector.
The poll revealed over half of FMB construction companies have already made people redundant in the last three months of 2008.
The figures have emerged from the body’s State of Trade survey, released today.
Around 60 per cent of FMB companies had reported a fall in workloads, a fall for the fourth consecutive quarter.
Expectations for the future also remain downbeat with 61 per cent expecting lower workloads in the first quarter of 2009.
Private house builders have remained the worst hit, with 71 per cent reporting a fall in workloads.
FMB director general Richard Diment said: “These figures are truly devastating. We know that when the recession last hit our industry 500,000 people were made redundant, we cannot allow that to happen again.
"The construction sector is weakening at a shocking rate, which is why the Government must act now to prevent any further suffering. The Government must do all it can to increase consumer confidence to encourage spending in the home improvement market.
"A targeted cut in VAT to five percent on home maintenance and repairs would help kick start this move.
“The Government’s recent £20 million loan guarantee to the SME sector is only part of the solution as it needs to go further and develop a range of measures to help the building industry.
"For instance, a strategy to tackle the refurbishment of the existing housing stock offers a potential market of between £3.5 and £6.5 billion every year. Reducing VAT from 17.5 per cent to 5 per cent on property repair and maintenance work would be most effective than the current 2.4 per cent cut, and further moves to reform Stamp Duty to make it a graduated tax would all help safeguard the thousands of jobs now at risk.”