The latest Markit/CIPS UK Construction PMI index fell from a four-month high in June of 58.1 to 57.1 in July.

UK construction companies are still highly upbeat about their growth prospects over the next 12 months with   more than half  (55%)  expecting an increase in business activity and only 4% forecasting a reduction.

David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said: “The  sector almost held steady last month, though there will be some uneasiness over the housing sector exhibiting its second slowest activity growth in the last two years.

“Budget cutbacks and delayed decision-making will have had some impact on civil engineering activity and  though housing is still a strong performer, commercial activity was the only area to see faster growth in July.

“New business wins were less in evidence as backlogs were tackled.

“Meanwhile, suppliers scrabbled to meet demand for a number of materials in short supply.

“Overall the sector’s optimism was still strong, as staffing levels remained high in anticipation of future  success, though issues around sourcing skilled individuals remained a thorn in the side of the sector.”