LONDON (Reuters) - British house building activity declined last month at the slowest pace since late 2022, with rising demand for housing projects pointing to a recovery in the property sector, according to a survey on Wednesday.
The S&P Global/CIPS Construction Purchasing Mangers' Index (PMI) recovered to 49.7, its highest level since August and up from January's 48.8, but marking a sixth month below the 50 threshold for growth.
Economists polled by Reuters had pointed to a reading Of 49.0.
"This was the best performance for the construction sector since August 2023 and the forward-looking survey indicators provide encouragement that business conditions could improve in the coming months," Tim Moore, economic director at S&P Global market intelligence, said.
A sub-index measuring the house building sector picked up to 49.8 from January's 44.2 - the highest since November 2022 when a gloomy economic outlook and high borrowing costs crimped building work.
British homebuilders have recently highlighted a recovery in buyer interest, but said wider economic concerns gave grounds to be cautious as some trimmed their build targets.
Overall, new orders expanded for the first time since July last year, S&P Global said, while builders turned their most optimistic about the year ahead since January 2022 on hopes of interest rate cuts.
But February's data also showed an increase in input cost burdens for the second month running, which construction firms attributed to wage bills, transportation costs and the cost of materials.
The employment index fell back to 48.1, representing the fastest rate of job shedding since November 2020.
Some builders also noted an impact from disruption to shipping in the Red Sea.
The wider all-sector PMI, which includes previously released services and manufacturing numbers, rose marginally to 52.7, up from January's 52.6.