New figures show that companies in the construction sector reported the first rise in new business in three years last month.
But the Ulster Bank Construction PMI also showed that overall activity continued to fall, though the drop was the smallest for three years. The index rose to 45 from 44.9 in June. Any figure below 50 means activity fell.
But confidence among construction companies about future business reached its highest level since early 2007.
A breakdown showed that housing activity fell from 45.4 in June to 40.8, recording the biggest fall of the three categories surveyed. Commercial activity recorded 46, up slightly from June's 45.8, while civil engineering picked up from 38.4 to 43.6.
Ulster Bank chief economist Simon Barry says that, despite the improvements in confidence and new business, conditions in the Irish construction sector remain 'very tough', with firms continuing to cut back sharply on their employment levels.
