UPDATE 1-SIG sees slowing rate of decline

* Like-for-like sales in H2 down 16.5 percent

* Comparative sales to become less demanding

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LONDON, Nov 12 (Reuters) - Insulation and roofing group SIG (SHI.L) said it is starting to see a slowing rate of decline despite volumes continuing to fall in the second half.

SIG said like-for-like sales in the second half are down 16.5 percent compared with the same period last year, but remain in line with the company's expectations.

"From October 2009 onwards, year on year comparative sales numbers in the UK begin to become less demanding," it said.

"Whilst the non-residential market is anticipated to continue to decline throughout most, if not all, of 2010, in the absence of any significant negative economic developments other sectors are expected to see a levelling out of demand as the year progresses," it added.

The group, which reported a 68 percent slump in first-half pretax profit in August, added underlying pretax profit for the full year will be in line with market expectations.

SIG said work has continued to decline in the UK non-residential however it has seen "a small consistent improvement in demand from the new build sector" in the second half.

But trading conditions in Ireland are "exceptionally harsh".

SIG said it is operating within its banking covenants and has closed 141 branches and cut 2,600 jobs to date.

(Reporting by Lorraine Turner)