By Jonathan Davies
The UK's construction industry grew at its slowest rate in 17 months, in December, but homebuilding grew at its fastest pace since July 1997, according to a closely watched survey.
The Markit/CIPS purchasing managers' index (PMI) for the construction sector fell to 57.6 in December, down from 59.4 in November and far below analysts' expectations of 59.
Any figure above 50 indicates growth.
Markit said there was strong demand for residential development and recovery in construction firms bidding for commercial projects.
Tim Moore, senior economist at Markit, said: "A sharp recovery in housebuilding, as well as resurgent demand for commercial development projects, continued to boost staff recruitment and sub-contractor pay rates across the construction sector in December.
"While new business growth moderated to its lowest for a year-and-a-half in December, UK construction firms are still highly upbeat about their prospects for output growth in 2015."
Jeremy Cook, chief economist World First, said:
“While growth has continued in the UK’s construction sector through the close of 2014, the rate of expansion of a sector that has seen a huge amount of support is starting to slow.
“Dynamics within the sector are still very healthy — new orders are strong, recruitment is high and prices are moderating — but all at worse levels to what had been seen at some point through 2014.
“In a phrase that we are only likely to see more of in the coming five months, ‘uncertainty related to the General Election in 2015 was noted to have weighed on confidence’ but that being said, the momentum and outlook for the UK construction sector remains strong for now.”
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