LONDON (Reuters) - British construction output rose solidly in September, but only partly rebounded from a sharp slump in August, official data showed on Friday.
Construction output increased by 1.8 percent in September -- roughly half economists' expectations -- after dropping by 3.0 percent in August, the Office for National Statistics said.
Looking at the third quarter as a whole -- which smooths out what is often volatile monthly data -- output was up by 0.8 percent, the same as an estimate of 0.8 percent used in last month's preliminary estimate of British economic growth in the third quarter.
Construction makes up about 6 percent of Britain's economy and the industry has grown robustly over the past year, recovering from some of the hefty loss in output suffered after the financial crisis.
Total output is now 3.5 percent higher than a year ago.
But more recently economists have feared that a slowdown in house price rises could lead to a drop in house building.
However Friday's data showed that house building remained robust, expanding by 5.1 percent in the third quarter from the second quarter. More public housing was built than in any quarter since the data began in 1997.
"Strength in new housing continues to provide upward pressure," the ONS said.
The future is less certain, as other data point to a slowdown in construction. A closely watched survey of purchasing managers in the sector fell to a five-month low in October from an eight-month high in September.
And on Wednesday the Bank of England almost halved its forecast of housing investment growth next year to 7.5 percent.
British house prices were rising by more than 10 percent in annual terms earlier this year, but have since slowed. Prices in the three months to October grew by the slowest rate since late 2012, according to figures from mortgage lender Halifax.
British regulators tightened lending rules earlier this year. High prices, slow wage growth and the prospect of higher interest rates have also sapped buyers' appetite.
Alongside Fridays' construction data, the ONS also released figures on British firms' profitability in the three months to June. This showed that profitability at private firms, excluding those involved in North Sea oil and gas, rose to its highest since late 1998 at 11.6 percent.
The net rate of return of North Sea energy firms sank to 16.9 percent, its lowest since data began in 1997.
(Reporting by David Milliken and William Schomberg)