British construction activity contracted last month for the first time since February, reinforcing fears that sector will no longer be able to drive the recovery in the way it did for much of last year.
The Markit/Chartered Institute of Purchasing and Supply's construction index dropped to 49.1 from 51.8 in November, almost three times the drop analysts had expected. Any readings below 50 indicate contraction.
The survey compilers said poor weather had contributed to the decline. Only commercial construction activity managed to expand, and even here the rate of growth was the slowest in almost a year.
House-building saw its sharpest contraction since April 2009 and civil engineering activity also declined.
Sterling weakened slightly after the data as investors bet that the sector's strong contribution to GDP growth in the second and third quarters of 2010 was unlikely to be repeated.
Although construction accounts for only around 6% of Britain's economy, the PMI index has proved a good leading indicator for GDP growth.
Economists are already pencilling in a marked economic slowdown this year as the rise in VAT tax sales and hefty public spending cuts start to bite.
The forward-looking elements of the survey provided little cheer. New orders growth picked up marginally in December, but remained below its long-run average and employment in the sector fell sharply.
'Anecdotal evidence suggested that staffing requirements continued to be assessed due to slow new order growth, with some companies indicating further redundancies,' Markit said.
