HOUSEBUILDERS have reported their busiest month since August as new research underlined renewed confidence in the sector.

Favourable economic conditions had lifted business levels, said the Chartered Institute of Purchasing and Supply (CIPS).

The CIPS activity index for housing registered 56.9 in January, up from 54.1 in December, as a fifth of firms reported a busier month.

That represents expansion at the fastest rate for six months and suggests that the market is firmly over the shock of the September 11 terrorist attacks.

The housebuilding boom helped fuel strong activity levels for the rest of the construction sector.

The overall barometer for construction activity recorded 54.0 last month, up from 52.9 in December and the fastest rate of growth for four months.

The index has now remained above the critical no-change marker of 50 for 36 consecutive months.

But employment pros-pects failed to keep pace as staff recruitment was at its weakest since April 1999.

The seasonally adjusted employment index reached 51.1 in January compared with 52.3 a month earlier.

Despite the weaker jobs picture, firms remained confident about prospects with the future business activity index continuing to signal optimism.

The CIPS report said: "The index showed the highest degree of optimism since last July, with expectations of increased workloads and planned expansion generally boosting confidence during the month."

Order books expanded for the 39th month running and at the fastest rate since August, CIPS added.

The survey also registered a robust increase in commercial construction activity, although the pace eased marginally from December