Builders suffered an 18th consecutive month of decline in June in the face of higher costs and subdued demand.

The S&P Global index of activity in the construction sector – where scores below 50 indicate contraction – came in at 38.4 last month.

That was the second-worst reading since the start of the Covid-19 pandemic, behind May’s six-year low of 38.2.

Housebuilding clocked up its worst month of the year so far as elevated mortgage costs and weak demand took their toll. 

Civil engineering activity fell at the sharpest rate since April 2020, when the UK was in lockdown. 

The report makes a mockery of Labour’s plans under Prime Minister Keir Starmer and Chancellor Rachel Reeves to unleash a building boom.

Shadow Business Secretary Andrew Griffith said: ‘The construction sector is being absolutely crushed with cost pressures rising and business confidence at rock bottom.’

Tim Moore at S&P Global said: ‘Construction companies commented on headwinds from subdued housing sales, elevated interest rates and squeezed consumer finances.’