CONSTRUCTION activity has surged at its fastest rate for eight months, driven by housebuilding and rises in commercial and civil engineering work.

The headline figure for the Chartered Institute of Purchasing & Supply's September survey on construction beat expectations, lifting to 64.2 from 64 the previous month, close to its strongest performance since summer 2007.

The rise in construction activity was in contrast to the CIPS manufacturing result, which hit a 17-month low when it was announced on Wednesday.

However new orders and employment slowed to a four-month low as builders faced escalating costs and bottlenecks in the supply of some materials, prompting the most cautious outlook from construction firms in more than a year.

Housebuilding remained the sector's fastest growing area of activity, although its rate of expansion eased to its weakest level since May.

Commercial construction increased at the strongest pace since January, while civil engineering output rose at the best pace for six months.

Builders said the growth in activity was linked to this year's economic recovery, which had made clients more willing to spend.

Markit senior economist Tim Moore said: "UK construction firms experienced a sustained and strong output recovery during September, in contrast to the weakening picture seen across the manufacturing sector at the end of this summer.

"Housing activity remains the brightest spot in the construction sector, but its out-performance has started to fade. Moreover, residential construction continues to see the most intense pressures on supply chains and skilled labour availability."

Construction accounts for around six per cent of the UK economy.

IHS Global Insight UK chief economist Howard Archer said: "This is a hugely impressive survey overall. The construction sector is seemingly sustaining robust expansion according to the purchasing managers, which is a welcome antidote to an apparent recent loss of momentum in manufacturing activity." He added that it was unclear when the Bank of England would raise interest rates from their historic low of 0.5 per cent given weak manufacturing data but there was unlikely to be any change this month. More than half of the construction firms surveyed were "highly upbeat" about the prospects for growth over the next 12 months, although this degree of positive sentiment was at the lowest level for almost a year.