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LONDON, Sept 29 (Reuters) - Britain's economy shrank less than previously estimated in the second quarter of this year, due to a better-than-expected performance by the construction industry, official data showed on Tuesday.
The Office for National Statistics said gross domestic product contracted by 0.6 percent in the quarter, less than the 0.7 percent decline it estimated a month ago.
On the year, GDP shrank 5.5 percent, unrevised from the previous estimate and still the biggest annual decline since records began in 1955.
Markets showed little reaction to the data, which was broadly in line with what many analysts had been expecting, and offer few clues about the strength of any rebound in the economy in the second half of the year.
"The GDP number was a bit better, but I think that was always likely given the revisions to the construction data that we'd seen," said Stephen Lewis, economist at Monument Securities.
"What it's going to be in the current quarter is probably quite different."
Most analysts expect the economy to return to growth in the third quarter of this year, although the recovery is likely to be weak and protracted.
The ONS said the upward revision was almost entirely due to stronger estimates of construction output than previously forecast. It said construction output fell by just 0.8 percent compared with the last estimate of a 2.2 percent decline.
The industry's improvement was driven by strong growth in public sector projects and infrastructure, while private sector work continued to decline, the ONS said.
The data also showed the economy was in worse shape than originally thought in the first three months of this year, because of an underestimate of the scale of decline in the services sector which resulted in a 2.5 percent drop in overall GDP compared with an earlier estimate of 2.4 percent.
Separately, the ONS released data on the balance of payments. The current account recorded a deficit of 11.424 billion pounds, the biggest since Q3 2007. That was equivalent to 3.3 percent of GDP, also the biggest proportion since Q3 2007.
The ONS said the deterioration in the current account balance was caused by falls in the income surplus, a lower services surplus and a bigger deficit on current transfers. These were only partly offset by a fall in the goods trade deficit of 0.9 billion pounds.