Small and medium-sized builders in the West Midlands are seeing an overall slowdown in both workloads and employment.
The warning, covering the first quarter, came in a Federation of Master Builders State of Trade report.
It showed one in three of building firms in the West Midlands experiencing a fall in workload and one in five (21 per cent) shedding workers.
The largest workload decline was in repair, maintenance and improvement of existing private houses, which has been the principal driver of growth.
The only positive result was in private housing new build, which saw a five per cent increase.
FMB regional director, John Watson, said: "Although it is not possible to form a conclusive judgement on the basis of one survey, these latest results do seem to point to a levelling of the underlying trend in workloads and jobs.
"Adding to this rather sobering picture is the fact that the proportion of builders reporting difficulty finding skilled labour is at its lowest level since the third quarter of
The proportion of builders reporting delays of more than two weeks in supplies of building materials and products also remains low.
For the summer, there were only modest expectations in terms of future workload and employment, with weak results in terms of future inquiries. The responses were far lower than those in the first quarter of 2004 and the weakest first quarter results since 1999.
Mr Watson said the picture was not uniform across the UK. " Trends are mostly stronger across the northern half of England, and also in both Scotland and Wales." n A much-needed £1.5 million housing scheme, which is contributing to the improvement of Droitwich's largest estate, has been completed.
Spa Housing Association, which owns around half of the 1,300 properties on the Westlands estate, has finished work on the latest refurbishment, in Meadow Walk.
The association has already spent more than £5 million on renovation across the estate and has now built a development of 25 new high quality homes for rent.
A range of new two and three-bedroom properties have replaced three-storey houses, and a further eight new apartments have also been built on adjacent land.