January marked the fifth consecutive month in which activity in the construction sector expanded.

According to the Ulster Bank Purchasing Managers' index, the rate of expansion was slightly lower in the month than in December 2013.

The index showed a reading of 56.4 in January, a decrease from the December reading of 58.3 but still above the 50 mark which signals growth.

The rise in total building activity reflected strong growth in the residential and commercial sectors, although the rate of expansion eased from the end of last year in both sectors.

Civil engineering activity continued to fall sharply, with the rate of contraction at the fastest level since last June.

Ulster Bank said that the rate of job creation in construction picked up in January and latest data on sentiment suggests that companies expect activity to continue to rise over the coming year. 

New orders continued to expand at a substantial pace last month with companies seeing improved customer demand, while competitive bidding helped companies to secure new business.

Commenting on the index, Ulster Bank's chief economist Simon Barry said that the more positive trends in the sector continue to be underpinned by solid increases in activity levels in the home-building and commercial arenas.

"The improvement in activity levels, in tandem with another strong gain in new orders, produced a fifth consecutive month of expanding employment, with the pace of hiring picking up in January to its second-fastest in nearly seven years," the economist said.

"Sentiment levels have stayed close to the survey record seen in December as some two-thirds of firms anticipate further growth over the coming year reflecting a belief that the nascent construction recovery will gain traction in the months ahead," he added.