Britain's biggest construction company, Balfour Beatty, said that trading was strong in the first half of the year, in stark contrast to the fortunes of housebuilders.

The upbeat half-year trading statement underlined the contrasting fortunes in different areas of the construction industry, where public and private sector bodies are still spending heavily on major infrastructure, but housebuilding has all but stopped in the face of severe rationing of mortgages.

Balfour's trading update gave no sign of any impact from a slowdown in either commercial property or the housing market, either in the US or the UK.

It said that its construction businesses, which include Balfour Beatty Construction, and Mansell and Haden Building Management, had seen particularly strong performances in the US and UK.

Very good progress had also continued in engineering, with a particularly strong performance in the UK regional civil engineering network.

Balfour Beatty, which serves markets including healthcare, education, transport, privately financed projects and social housing, said it was also continuing to make substantial commitments to new Public Private Partnership projects - Government and local authority schemes to bring private sector finance and expertise into infrastructure and building projects. The group is also developing an infrastructure asset business and adding to its PPP bidding capability outside the UK, moves that are in part a hedge against the cyclical nature of the construction industry.

The company has also carried on acquiring smaller companies, despite the credit crunch. In May it raised £186 million through a surprise share placing, to give it more financial headroom to carry out such acquisitions.

Since the placing it has bought Barnhart, a Californian construction management company for $116 million (£58 million). Barnhart operated in the US education market. It has also agreed to buy Schreck-Mieves, the German rail engineering group for €36 million (£29 million).

At the end of May, the construction group's confirmed order book stood at £11.8 billion, an increase of £400 million since the end of 2007.

“We anticipate that order intake and trading performance will remain strong throughout the year and that we will make good progress in 2008,” the group said.

Balfour added that it had secured a number of major new orders this year including a $330 million contract for the 281 North Toll road project in San Antonio, Texas. The group said its overall future work pipeline has grown substantially, highlighting its appointment as preferred bidder for the widening and maintenance of the M25 motorway surrounding London.

David Phillips, analyst at Landsbanki, said that positive trends were emerging across the group's four main divisions. He added that Balfour was an essential infrastructure player with strong skills and market positions and rated the shares as a buy.