British construction firms suffered a sharp drop in orders in August, adding to concerns about a slowing economy amid rising interest rates, a survey showed on Wednesday.
The S&P Global/CIPS UK Purchasing Managers' Index for the construction industry fell to 50.8 in August, remaining in growth territory but down from 51.7 in July.
The reading was slightly above the forecast of 50.5 in a Reuters poll of economists.
Tim Moore, Economics Director at S&P Global Market Intelligence, said the decline in recent months in residential house-building was the steepest since early 2009 excluding the COVID-19 lockdown period, although August's figure was slightly above a low struck in June.
Builders cited weaker economic conditions, cutbacks to new building projects and local planning delays as factors holding back house-building activity.
Britain's housing market has slowed in recent months against the backdrop of the Bank of England's 14 consecutive interest rate rises and a prolonged cost-of-living crisis, with indicators of buyer demand and house prices sliding.
S&P said total new orders for the construction sector fell at the fastest pace since May 2020.
In contrast to house-building, commercial building and civil engineering activity grew in August, albeit at a slower pace than in July.
"Resilient demand for commercial work and infrastructure projects are helping to keep the construction sector in expansion mode for now," Moore said.
However, forward-looking measures of the construction PMI fell, with business activity expectations for the year ahead the weakest since January.
The wider all-sector PMI, which includes recently released services and manufacturing data, fell in August to 48.8, its lowest since January. (Reporting by Suban Abdulla Editing by William Schomberg and Catherine Evans)