THE UK construction sector contracted at its fastest rate for two-and-a-half years in June, according to key market indicators.

The fall in the seasonally-adjusted adjusted Markit/CIPS Construction Purchasing Managers' Index, published yesterday, was also the greatest since February 2009, in contrast to the solid expansion seen in the previous survey period.

York builders Persimmon Homes managed to buck the trend, showing steady growth in figures from the company's trading update yesterday.

The firm, who also trade under the Charles Church brand, have seen an 18 per cent rise in the rate of sales in the first six months of 2012, compared to the same period last year.

The builder completed on 4,712 new properties in the first half of the year, compared with 4,439 in the first six months of 2011, an increase of six per cent.

Turnover for the first half was £805m, 13 per cent up on the previous year.

The company opened 65 new sites in the first half of the year and are now selling from 375 sites.

The company is aiming to open a further 60 new sites during the second half of the year.

Pricing has remained stable during the first half of the year.

The group's half-year results to June 30 will be announced on August 21.

But in the building industry generally, it was a more gloomy picture.

Part of the decline was attributed to the Jubilee Bank Holidays through anecdotal evidence, but weaker underlying conditions were also widely commented on.

Civil engineering and housing activity were the worst performing areas, with both seeing a decline in output for the first time since the weather-affected downturn in January.

Commercial activity increased only marginally, and at its slowest pace for 28 months.

June showed a moderate drop in new work received by construction firms, thereby ending an eight-month period of expansion, with the rate of decline the fastest since April 2009.

A lack of new work to replace existing projects, alongside the need to cut costs, resulted in a marginal decline in employment in the sector.

The fall represented the first decline in workforce numbers since February, with the usage of sub-contractors also declining, and at the sharpest pace since August 2011.

Average cost burdens increased in June for the twenty-ninth successive month.

But the rate of input price inflation was much weaker than the previous month and survey respondents suggested that lower fuel prices had helped offset increased costs in energy and raw materials.

Kevan Carrick, senior partner at JK Property Consultants in Newcastle, said the results echoed a general trend in the North-East construction industry.

"Often there is no new work in the pipeline when contract come to an end," he said.

"There are two main problems - one is a shortage of finace, and the other, in the commercial sector, is a shortage of demand.

"In the commercial property sector, the value of property is generally less than the cost of development, so there is no new development work unless there is an occupier ready to take the space.

"Having said that, it is not all doom and gloom.

"There are a number of big potential contracts in the offing waiting for decisions and sign offs - Hitachi is the biggest and most obvious one of these.

"There are also some sectors of the construction sector which are growing - the low carbon energy sector seems to be doing quite well, so there are some bright spots."