UK housebuilding activity grew in July at its fastest monthly pace since November 2003, and has extended its run of expansion to 18 months, a survey has shown.

The Chartered Institute of Purchasing and Supply (CIPS), which published the survey yesterday, said respondents had attributed the strength of housebuilding activity to favourable funding conditions and strong demand for new housing starts. CIPS noted housebuilding was enjoying its longest continuous period of growth for almost a decade.

Its housing activity index jumped from 66.6 in June to 68 in July on a seasonally-adjusted basis, moving even further above the level of 50 which separates expansion from contraction, having stood at 62.7 in May. The UK housebuilding sector has been fuelled in recent times by measures put in place by the Coalition Government to fuel the residential property market.

The resultant surge in house prices, which has been particularly strong in London, has added to concern about the unbalanced nature of the UK economic recovery.

Growth of the civil engineering sub-sector also accelerated in July, according to CIPS's latest monthly construction survey. The rate of increase of commercial property construction activity slowed slightly, but was still strong.

Overall, growth of UK construction activity eased marginally in July, according to CIPS, but remained strong by historical standards. And CIPS found that employment in UK construction had grown in July at the fastest pace since the survey began in April 1997.

Tim Moore, senior economist at financial information company Markit and author of the construction survey, said: "July's figures suggest the UK construction sector is enjoying its strongest cyclical upswing since the global financial crisis, while a new record rise in employment [shows] construction firms are increasingly confident about the sustainability of the upturn. All three core categories of construction activity saw historically steep improvements in output levels through July, unsurprisingly led by a resurgent housebuilding sector."

However, he also highlighted a continuing increase in supplier delivery times and sharp rises in rates charged by sub-contractors.

Mr Moore said: "Looking ahead, a pressing concern for construction companies is the availability of materials and suitably-skilled labour to support the recent growth streak.

"Cuts to supplier capacity have ushered in the worst period of input delivery delays since the survey began in 1997, while this summer has also been notable for construction firms reporting near-record increases in rates commanded for sub-contracted work."