Latest figures from the Markit/CIPS Construction Purchasing Managers’ Index show construction output rose in January for the 13th month in succession.
The index dipped to 51.4 from 53.2 in December where anything above 50 represents an increase in output.
But confidence levels about future prospects rose to an eight month high to hit the second-greatest degree in the survey’s history.
Sarah Bingham, Economist at Markit and author of the UK Construction PMI, said: “Construction firms grew more upbeat about their prospects for 2012, with business confidence showing the second-greatest monthly jump in the survey’s history.
“This suggests that growth may pick up again in the sector in coming moths.”
David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “It’s clear that many businesses have replenished their levels of optimism and have high expectations for improving economic conditions and new contracts.
“This confidence bodes well for the year ahead, although this visibility over potential new business will need to convert quickly into tangible work if employment levels are to improve.”
Andrew Duncan, director of property at the programme management and construction consultancy Turner & Townsend, said: “Early indications for 2012 are that things have improved since the last quarter of 2011 – and that more work is coming down the pipeline.
“Certainly there are more bidding opportunities about, even if there is intense competition on price.
“And that’s why the encouraging levels of confidence are still not being converted into anything more than meagre levels of new business.”