Builders battle jitters over cuts to spending

Britain's builders fared better than its manufacturers in December but nerves over possible spending cuts are still to the fore, an industry survey revealed today.

The latest Chartered Institute of Purchasing and Supply/Markit activity index, where a score over 50 signals growth, improved to 53.2 last month. All three industry sectors, housebuilding, civil engineering and commercial building, registered growth for the first time in nine months, Cips said.

This contrasts with a manufacturing industry in reverse during December, although confidence in the building industry is still subdued, Cips added.

Chief executive David Noble warned: "It's still too early to measure the impact of some of the big Government spending projects announced in the autumn review statement. Overall expectations for the coming year were generally hopeful but continue to be skewed by wider economic uncertainties."

An improving construction industry is welcome but likely to have little impact on overall growth because of its small 6% share of the economy. Industry forecasts have warned the sector will not return to significant growth until 2014.