The Chartered Institute of Purchasing and Supply/Markit construction PMI index nudged up to 30.9 in March, compared to February's series low of 27.8 in February.
CIPS Director Roy Ayliffe said "unremitting global forces continued to batter the UK construction sector".
"Inevitably, extremely weak demand led to a significant loss of construction jobs," he said in a statement. "Firms not only reduced contractors' days but also cut headcount at an unprecedented pace."
The housing sector suffered the most marked contraction in output, the survey said. Civil engineering outperformed other areas of construction.
British builders reported a substantial decrease in new placed in February and noted a sharp cut in client budgets, strong competition and fewer customer inquiries.
The pain of the decline was partly alleviated by a "dramatic reduction" in input prices," Ayliffe added.
Gemma Wallace, economist at Markit Economics, said constructors were confident that operating conditions would improve in the next year.
Separate figures from the Office for National Statistics showed new orders in the construction industry fell by 9 per cent in the three months to February compared to the previous three months.
Orders in the 12 months to February fell 24 per cent compared with the previous year. Orders in the three months to February dropped by 34 percent compared to the same period a year earlier.
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