The latest Ulster Bank construction purchasing managers index shows that activity in the sector fell for the 35th month in a row in April and remained under the break-even level of 50.
However, the index rose marginally to 45.5 last month from 45.2 in March. This rise marked the fourth increase in a row and the index now stands at its highest level in two and a half years
Ulster Bank says the steepest fall in activity was seen in the commercial sector, with that index falling to 39.6 from 43 in March. The housing index rose to 43.5 from 42.4, while the civil engineering index increased to 42.5 from 37.4.
Companies said that the latest reduction in activity was mainly due to a fall in new business. The rate of decline in new orders accelerated while companies also reported intense competition.
The scarcity of new business led to another big fall in employment numbers in the construction industry last month. Job numbers have now fallen every month for the last three years.
Input prices fell again last month, although the pace of decline eased since March and was actually the slowest since September 2008. Intense competition was again evident.
Despite the problems the industry is experiencing, Ulster Bank says that the level of sentiment last month was the strongest since March 2007. Companies expect activity to be higher in a year's time than current low levels as the wider economy begins to recover.
Ulster Bank's chief economist Simon Barry said the construction sector is the 'clear laggard' in terms of the sectoral recovery stakes, as both the manufacturing and services PMIs have seen a return to positive growth in the past couple of months.
'Construction is not benefiting from the global recovery to the same extent as other areas of the economy, but there is some encouragement to be taken from the less negative trajectory which has emerged so far this year,' he said,
'The expectations index of the April survey showed confidence at its highest level in three years, reflecting an ongoing improvement in sentiment regarding prospects for the overall economy,' he added.
