According to the Federation of Master Builders (FMB), the number of new homes built in the UK last year was well below the government target.
However, it noted that some construction companies have kept afloat during the economic slump by concentrating their efforts on refurbishment and renovation projects, rather than building a property from scratch.
"Some members are doing quite well in terms of refurbishment," said Brian Berry, director of external affairs at the FMB.
"People are obviously not moving as much, but they have been upgrading their property."
However, he said the winner of the next general election will have to make some tough decisions regarding the future of the construction industry, which could impact on the number of major capital projects that take place.
Business secretary Lord Mandelson this week said the government is considering offering incentives to private investors to encourage them to fund various infrastructure developments.