The Markit/Chartered Institute of Purchasing and Supply construction PMI fell to 54.1 in July from 58.4 in June, suggesting that expansion in the sector may have peaked.
Official data last month showed British construction output jumped 6.6 per cent between April and June – its biggest rise in almost 50 years, but the survey will raise concerns this pace of growth will not be repeated.
Nonetheless, it was still the fifth consecutive reading above the 50-level which separates growth from contraction.
UK construction companies reported a further rise in new business during July – the fifth increase in as many months. However, with more panellists indicating that new orders had fallen in July compared to in the previous month, the rate of expansion slowed to the weakest since March, the survey said.
Employment stalled after two months of rises and confidence about business prospects for the coming year fell to its lowest in 15 months.
"In the face of ongoing public sector spending cuts and steep input price inflation, it's really going to be a case of slow and steady wins the race," said CIPS chief executive David Noble. "The industry has to come to terms with a much altered, post-recession landscape, where full recovery may take some time yet."
The construction sector accounts for around 6 percent of total British economic output.