The comments were made in response to S&P and CIPS’ latest construction PMI data for September, which highlighted the steepest decline in construction output since May 2020. 

The figures show falls across many indices, most notably in housing activity, new orders and civil engineering activity, which dropped to 38.1, 44.2 and 45.7 respectively.

Commenting on the data, Kelly Boorman, partner and national head of construction at RSM UK, said: “This month’s fall in the headline PMI does not come as a surprise, with the data finally catching up with sentiment on the ground.

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“This follows prolonged slowdown in the residential market, the post-Covid lag after working through major backlogs of work, and this week’s government announcement that HS2 is being axed. 

“Many housebuilders had planned for HS2 and acquired land and planning in line with this project and will need to revisit to align with new local transport, connectivity and community project plans.”

She added: “Long-term industry outlook is severely dampened due to the axing of HS2, with questions raised by the industry as to the timeline in reallocating the £36bn to other infrastructure projects and the pace in which these can be procured and mobilised.

“The scrapping of HS2 will undoubtably derail the pipeline of future activity for many contractors and their supply chain, coupled with the delay in mobilising new infrastructure projects not even announced by government, this will put some businesses at risk and create further industry uncertainty.”

Thomas Pugh, economist at RSM UK, added: “Questions remain about how quickly and effectively the government can redeploy the money saved on HS2, but given the employment and inflation situation looks better now than it did a couple of years ago when HS2 was being procured, if government can redeploy the HS2 funding and mobilise new projects this will help the industry recover.”