The CIPS/Markit survey came in at 48.6 during January, up from 47.1 in the previous month. New orders decreased for the second consecutive month in January with firms citing subdued client confidence as well as funding constraints and competitive pressures.
House building – one of the few bright spots in recent months – continued to record growth in activity last month, albeit at a much slower pace than in December.
The pace of job shedding in the construction sector encouragingly eased for the third month running to its slowest since August 2008.
Construction firms continued to hold positive expectations in January with around 60 per cent of firms anticipating growth over the next 12 months.
However, David Noble, chief executive at the Chartered Institute of Purchasing and Supply, said: “A wider outlook for 2010 reveals a number of headwinds”.