The recovery in the country's construction sector continued in May, although the pace of growth slowed from the previous month's highs.

The Ulster Bank construction Purchasing Managers' Index stood at 60.2 in May, down from the April reading of 63.5 but still showing a sharp increase in total construction activity.

Activity has now risen in each of the past nine months, with the latest expansion linked to higher workloads and improving confidence.

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

Ulster Bank said the commercial sector was the best performing sector again in May, while it also noted a strong expansion in housing activity.

While activity on civil engineering work continued to fall, the rate of decline was the slowest since December 2007.

Increased levels of activity resulted in construction companies raising their buying activity and taking on extra staff last month. Employment increased for the ninth month in a row and the rate of job creation remained sharp despite easing from the April level, Ulster Bank noted.

Growth of input buying also remained strong in May, with around 30% of companies increasing their purchasing levels.

The survey also showed that business sentiment among building firms remained elevated in May and was among the strongest in the history of the survey.

Ulster Bank's chief economist Simon Barry said that companies in the construction sector reported success in securing contracts for work both in Ireland and abroad, and were confident that these trends would continue over the coming year. 

"Another notable aspect of the latest data was a sharp acceleration of cost inflation amid reports that suppliers have started to raise their charges in response to strengthening demand for inputs. Overall, the May data re-affirms the recent view of a sector on the mend," Mr Barry concluded.