Growth of activity and new business in the construction sector both reached multi-year highs in April as companies responded to increased workloads by increased their staff numbers.

The Ulster Bank Construction PMI moved up to 63.5 in April from 60.2 the previous month. Any figure over 50 signals growth in a sector, while a figure under 50 signals contraction.

Ulster Bank noted that activity has now increased in each of the past eight months, with the latest expansion the fastest since December 2005.

The improvement in overall construction activity reflected substantial rises in both the residential and commercial projects, with rates of growth increasing in each case.

However, civil engineering activity continued to fall and the rate of decline was sharper than that seen in March.

Today's latest figures show that new orders rose for the tenth month in a row and the rate of growth accelerated for the third consecutive month to the strongest since February 2006. 

Companies said that the housing and commercial sectors had been the main sources of growth in new business.

As workloads continued to increase, building firms took on more staff again to deal with the higher workloads. The rate of job creation quickened and was one of the fastest in the history of the index, Ulster Bank noted.

Cost inflation remained modest last month, the index shows, and slowed from the rate in March. 

Meanwhile, construction companies said they expected market conditions and new business levels to improve further over the next 12 months, leading to growth of activity. Ulster Bank said that optimism improved to the strongest in the series history.

"Taken together with the robust recent readings of the services and manufacturing equivalents, the much-improved trends in the Construction PMI provide clear evidence of the broad-based improvement that is now taking hold across both export-oriented and domestic-facing sectors of the Irish economy," commented Ulster Bank's chief economist Simon Barry.