THE UK'S housebuilding sector growth is showing signs of easing, a report has revealed.

A survey says housing continues to remain strong and helped the construction industry hit an eight-month high in September.

However, the closely-watched CIPS/Markit industry report warned the sector's expansion is weakening, falling to its lowest level since May.

It added a rise in new orders and employment slowed to a four-month low as builders faced escalating costs and supply chain bottlenecks.

Tim Moore, Markit senior economist, said: "UK construction firms experienced a sustained and strong output recovery during September.

"Housing activity remains the brightest spot in the construction sector, but its out-performance has started to fade.

"Moreover, residential construction continues to see the most intense pressures on supply chains and skilled labour availability.

“Looking ahead, firms are more cautious about their prospects for output growth than at any time since October 2013.

"Although positive overall, a range of factors tempered business optimism in September, including strong cost pressures, concerns about skilled labour supply and signs that house building growth has cooled from the multi-year records set earlier in the year."

The warning comes after North-East builder MJ Gleeson Group, which has homes in Consett, County Durham, and Ushaw Moor, near Durham City, earlier this week revealed it had bucked such trends by doubling annual pre-tax profits to £12.2m.

The Markit/CIPS report also revealed commercial construction increased at the strongest pace since January, with civil engineering output rising at its best pace for six months throughout September.

David Noble, CIPS group chief executive, added: "The construction industry’s strong performance continued unabated in September, sending out a reassuring message about the underlying health of the UK economy.

"Domestic housing’s mantle of star performer was dislodged slightly, with growth in commercial and civil engineering activities accelerating notably.

"The rise in commercial activity was the second-fastest since the summer 2007 and could be the most telling as it represents businesses’ willingness to invest; they are putting their money where their mouth is."

The figures came after a previous CIPS/Markit report into manufacturing this week warned that sector had hit a 17-month low.

It said growth in new orders was near stagnation levels, with firms reporting weaker increases in production, new business and new export orders.