Construction activity continued falling in December, data from the Chartered Institute of Purchasing and Supply (CIPS) showed today.

The December purchasing manager's index rose to 47.1 from 47 the previous month. A reading below 50 indicates contraction.

'December was another disappointing month for the UK construction sector,' said CIPS chief executive David Noble.

'Unlike other parts of the economy, it seems unable to escape the shackles of the recession, as it entered its 22nd successive month of decline.'

However, he pointed out that the residential sector had seen a marked improvement increasing house prices appeared to be encouraging new building.

'Purchasing managers also remain confident that 2010 will be a much better year for the construction sector and that it will begin to grow again,' he said.

Howard Archer, chief UK and European economist for the analyst group IHS Global Insight, noted the 47.1 reading was the second slowest rate of contraction since March 2008, when activity started contracting.

'This is still clearly below the critical 50.0 level that indicates unchanged activity, although it is a major improvement from February when the index was below 30,' he said.

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