British construction output stagnated in July as a rapid expansion in house building started to level off, causing annual growth to sink to an eight-month low.

However, orders for new work rose at the fastest rate in a year, leaving economists confident that the coming months would bring robust growth, particularly as earlier private-sector surveys have also pointed towards a continued strength.

Construction output was unchanged on the month in July, compared with growth of 1.2 per cent in June, the Office for National Statistics said yesterday. Annual growth more than halved to an eight-month low of just 2.6 per cent.

But orders looked more upbeat, rising by 3.8 per cent in the second quarter from the first three months of 2014, the biggest rise in a year.

“Signals from survey and order book data suggest the construction industry has fared better than the official output data would have us believe over the summer,” said Chris Williamson, chief economist at Markit.

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