The latest activity index from the Chartered Institute of Purchasing & Supply revealed today that the construction activities in UK grew in the month of March. This was reported as the first growth in construction activities since February 2008. The growth in the sector was mainly attributable to the rising new orders as private sector demand increased.

The Chartered Institute of Purchase and Supply/Markit construction PMI index was reported to 53.1, increased by 4.6 points while the index was on 48.5 in the month of February. A reading above 50 shows expansion in the activities.

CIPS said that the increase in construction activity in the month of March was supported by the increase in the building of commercial and housing properties and also by the rising new orders. According to CIPS, the residential house builders posted the strongest growth in activity and commercial sector also grew in March for the first time in two years.

But on the other hand, CIPS said that it has a cautious outlook for near future as there was reported a sharp decline in employment last month. CIPS said today that there might be some cutbacks in Government spending and this could lead down the confidence among construction firms over future levels of new orders.

"Though its great to see the UK construction sector turn the corner after two years of relentless contraction, it's still very early days," said David Noble, CIPS chief executive. "The recession hit construction the hardest and because the industry is operating from such a low base, this upturn may be short lived."