The construction sector expanded in March for the first time in more than two years, led by a sharp rise in new orders in the housing and commercial sectors, a survey showed on Tuesday.

The Chartered Institute of Purchasing and Supply/Markit construction PMI index jumped to 53.1 last month from 48.5 in February -- the first reading above the 50 level that divides growth from contraction since February 2008.

Incoming new orders increased during March for the first time in four months and only the second time in the past two years.

However, construction firms continued to shed jobs in March and concern over cutbacks in government spending meant they were less optimistic than in February.

"Though it's great to see the UK construction sector turn the corner after two years of relentless contraction, it's still very early days," said David Noble, chief executive officer at the Chartered Institute of Purchasing and Supply.

"The recession hit construction the hardest and because the industry is operating from such a low base, this upturn may be short-lived."

Of the three subsectors, house-building showed the strongest rise in activity, expanding for a seventh consecutive month. Commercial activity reported growth for the first time since February 2008. The civil engineering sub-sector, which is typically more reliant on public spending, contracted.

Construction accounts for around 6 percent of Britain's economic output.

In the first quarter as a whole, British construction activity was broadly unchanged, suggesting the sector is no longer acting as a drag on GDP.

"The overall impression is that the construction sector remains fragile but is at least stabilising after enduring a major recession," said Howard Archer at IHS Global Insight.

"Nevertheless, the sector still faces a very challenging environment and it is likely to be hit significantly by the government's need to rein in its spending."