CIVIL engineering and building firm North Midland Construction has issued a profits warning and cut jobs as it revealed it had been hit hard by the economic downturn.

The Huthwaite-based company, which is listed on the Stock Exchange, said today that pre-tax profits in the first half of the year were 60% down on the same period in 2007.

North Midland employs more than 1,000 people on a number of different sites around the country. It has not revealed how many jobs will go.

Company chairman Robert Moyle blamed the "disappointing result" on the company's North Midland Building Division, which saw sales fall from £21.4m in the first six months of 2007 to £14.5m.

He said: "North Midland Building Limited...was severely affected by the economic downturn, with the cancellation of projects and profitability fell to £0.17m from £1.4m in the previous year."

North Midland's highways and civil engineering and mechanical division and Nomenca mechanical and electrical engineering divisions still performed strongly. But its utilities division recorded a small loss after pulling out of a telecoms contract.

North Midland has yet to reveal the scale of job losses. Unlike many construction companies it directly employs most of its tradesmen.

Mr Moyle said: "The overall economic picture is becomingly increasingly difficult, with a general decline in tendering opportunities, project cancellations due to funding problems and rapidly increasing costs, most particularly in energy and materials.

"There is a need to enhance the size of the order book in the immediate future. The overall cost base has been reviewed and, sadly, a redundancy programme has been implemented."

Mr Moyle says the weakening economic conditions mean North Midland will not now hit its forecast £5m profit for the year. But he added: "The group balance sheet remains strong and the group would expect to exit the current economic downturn in a stronger relative market position."