The Construction Products Association (CPA) has said the industry is facinga recession that could last three years.
It predicted output would fall seven per cent in the next three years and normal growth would not return till 2011.
"These forecasts are the gloomiest we have produced since compiling this information," said chief executive Michael Ankers.
The revised figures are based on falling industrial and commercial work as the credit crunch spreads throughout the economy.
"With shrinkage already being experienced in privately funded new work, the industry is certainly in for a bumpy ride as output falls to levels last seen in 2002.
"Turnaround is now expected in 2011 at the earliest although the housing starts per year will continue at an historic low until 2012."
London’s commercial property is a mix of new and old buildings, some less affected by building forecasts and still attractive to firms.