UK construction activity fell at its slowest rate for almost two years last month, according to the Chartered Institute of Purchasing and Supply

The CIPS/Markit construction purchasing managers’ index stood at 48.6 during January, up from 47.1 in the previous month, signalling the smallest fall in activity during the 23-month period of contraction.

The survey monitors three areas of construction activity: housebuilding, commercial and civils. Housebuilding was the only one of the three to grow in January, albeit by a slower pace than in December. The rates of decline eased in the other two sectors.

David Noble, chief executive officer at the CIPS, said: “Construction continues to be the worst performing sector of the UK economy – it is struggling in the face of credit supply shortages and overall economic uncertainty.”

He added that, although the rate of decline slowed, competition is still intense. “Operating conditions are tough and firms are now measuring performance from such a low base level that there’s a general consensus that things can’t get much worse. Particularly disappointing is the slowdown in housebuilding, as this has been one of the few bright spots.”