The construction industry's confidence is on the rise, with January's Markit/CIPS survey revealing the second-greatest monthly jump in business confidence in the study's history.

The latest reading of overall health in the construction sector slowed to 51.4 in January from 53.2 in December because of declines in output in housebuilding and the civil engineering sector, while commercial activity rose for a 23rd consecutive month. A reading over 50 represents growth.

However, the overall rate of expansion was the weakest for four months, causing employment to stagnate.

The rate of cost inflation was the third-slowest in the current two-year period of monthly increases.

The signs of increased confidence among construction firms comes a day after CIPS said the manufacturing sector had expanded at the fastest pace since last March.

Sarah Bingham, an economist at Markit, said Thursday's report suggested growth may pick up again in the sector in coming months.

"On top of the surprisingly strong start to 2012 reported by the sister survey of manufacturing, it will raise hopes that a slide back into recession may yet be avoided," she said.

CIPS chief executive David Noble said: "It's clear that many businesses have replenished their levels of optimism and have high expectations for improving economic conditions and new contracts."

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