Factories in Warnham and Rudgwick operated by Austrian company Wienerberger will slow production to address stock imbalances.

But an historic brickworks in Ewhurst also owned by the firm will close at the end of this month, leaving 40 staff without jobs.

Managing director Harald Schwarzmayr said: "The economy in general and the housing sector in particular are experiencing a sudden and strong downturn.

"Tightening credit lending of banks led to a strong reduction of mortgage approvals in Q1 2008.

"In addition, house prices have been in decline since Q4 2007.

"As a consequence, the number of new built homes, and with it the consumption of bricks, is declining and we are confronted with historic lows of dispatched bricks.

"As forecasts see only a limited likelihood for a recovery in the short term, we have had to take appropriate steps in this difficult market environment."

Warnham's plant in Langhurstwood Road will be shut down for ten weeks, affecting its 60 staff.

Meanwhile the Rudgwick site in Lynwick Street will cease operating for eight weeks, affecting 50 employees.

This will probably take place in the run up to Christmas to capitalise on high winter fuel bills.

But the business confirmed there were no planned redundancies or total closures for the two West Sussex sites.

The company said earnings would be affected but that employees would be given a pay package agreed with their union.

Wienerberger said it would do everything it could to support the people affected, including working with the job centre and transferring workers if vacancies came up at other factories.

These were part of a series of shut downs at ten other sites UK wide, whilst managers watch the market with baited breath.

The UK usually sells 2.8bn bricks a year, but by 2006 this had fallen to 2.4bn.

The following year saw sales stagnate at 2.4bn, but experts are widely predicting 2008 could see this figure plummet to 2bn or lower, representing a 17 per cent fall on last year's sales.

Meanwhile production at Ewhurst and Ockley/Smokejack's Brickworks will be 'mothballed.'

The closures come only two months after production at Swallow's Tile in Cranleigh ceased and the site was sold.

Mr Schwarzmayr added: "The sustained reduction in demand means that we have had to adjust our UK capacity to meet these unprecedented market conditions.

"It is with much regret that we have announced our intention to mothball production facilities at our Ewhurst brickworks by the end of June 2008.

"Production schemes at our other factories will be brought in line with the lower expected sales volumes."

Wienerberger operations director Pat Furr added: "I have been in the industry for 30 years and I have never seen it in such a dreadful state.

"To call it doom and gloom would be an understatement.

"I think there may well be more to come but, hopefully, we have done enough to see us through, but if not we will have to look at how to tackle it."

Two years ago the Ewhurst factory was identified as a possible landfill site for Surrey County Council's waste plan.

But Mr Furr said there were no plans to sell any of the sites because they were all in the company's long term plans.

He added: "While the main production has stopped we have maintained the specialism manufacturing unit which continues to employ 12 people.

"There is lots of clay there and it is a good operation so I think something will happen in the future.

"Warnham is one of our biggest operations and very profitable and we have long term plans for it, while we are looking at various ways of improving productivity at Rudgwick."

The brickworks in Ewhurst began manufacturing in the 1920s and was taken over by Wienerberger – one of the world's biggest brick suppliers – in 2004.

Wienerberger, based in Vienna, is the world's largest producer of bricks and number two on the clay roof tiles market in Europe