Irish building companies continued to witness declining business activity last month, but new orders and employment fell at slower rates.

This is according to the latest Ulster Bank Construction PMI, which posted a reading of 45.3 in February, down from the reading of 45.8 in January.

The index is a seasonally adjusted index which tracks changes in total construction activity. It examines the housing, commercial and civil engineering markets.

It shows that the weakest fall in activity was seen on housing projects, with the sector also the only one of the three sectors to post a slower decline than at the start of the year.

Commercial and civil engineering each saw a slightly quicker fall in activity.

Ulster Bank economist John Fahey said that the construction sector has been severely hampered by the lack of new business opportunities. He noted that the new orders index continued to contract last month.

''However the rate of contraction in new orders slowed for the third month running and is now at its best level since March 2012, offering some slight encouragement that the dampening impact from the lack of new business is easing,'' he added.