By Suban Abdulla
LONDON (Reuters) - Activity in Britain's construction sector increased in April but growth was lopsided, with residential house-building suffering its steepest decline since May 2020, weighed down by weaker demand and higher mortgage rates, a survey showed on Friday.
The S&P Global/CIPS UK Purchasing Managers' Index for the construction industry came in at 51.1 in April, up from 50.7 in March and slightly above the forecast of 51.0 in a Reuters poll of economists.
Tim Moore, economics director at S&P Global (NYSE:SPGI) Market Intelligence, said cutbacks in new house-building projects continued to weigh on construction output.
"While there have been some signs of a recent stabilisation in market conditions, this has yet to feed through to construction activity," Moore said.
The most recent official data showed construction output rose 5.7% in the year to the end of February.
Britain's housing market has shown signs of recovery in recent weeks, after a sharp slowdown triggered by the market turmoil which followed former prime minister Liz Truss's "mini-budget".
Bank of England data published on Friday showed British lenders approved the highest volume of mortgages since October 2022 in March, while mortgage lender Nationwide on Tuesday reported a 0.5% monthly rise in house prices in April after they fell in the seven previous months.
British homebuilders Barratt, Persimmon (LON:PSN) and Taylor Wimpey (LON:TW) recently highlighted a recovery in buyer interest in the traditionally strong spring selling season, but said broader economic headwinds gave grounds to be cautious.
Friday's PMI survey showed a steep fall in residential building work for the fifth month in a row in April.
However, commercial construction was the second-strongest in six months, boosted by an improvement in Britain's economy and a rebound in business confidence.
Overall new orders growth was the second-fastest since July 2022 and employment rose modestly.
Construction firms said supply chain pressures improved by the most since 2009, just after the global financial crash. Input price inflation was meanwhile at its softest since November 2020, although higher energy bills and prices for some construction products continued to push up costs.
The wider all-sector PMI, which includes previously released services and manufacturing figures, rose to its highest since April 2022 at 54.5, up from March's 52.1.