The pace of growth in construction activity picked up in March after four months in a row during which the rate of expansion had been slowing.

The latest Ulster Bank purchasing managers' index - a seasonally adjusted index designed to track changes in total construction activity - rose to 52.9 in March, up slightly from 52 in February.

The index showed that the growth reflected a rise in both commercial and house-building activity.

It also signalled a rise in new orders which, Ulster Bank chief economist Simon Barry said should underpin activity levels in the months ahead.

Ulster Bank said that activity on both housing and commercial projects rose at the end of the first quarter and at marginally faster rates.

But civil engineering activity fell for the second month in a row and at a "solid" pace.

It also noted that new business increased last month, as has been the case since July 2013, with some companies reporting an improvement in market conditions.

The higher level of new business led to a number of construction firms taking on extra staff, which resulted in the 19th month in a row of employment growth in the sector. However, the rate of job creation slowed to the weakest since December 2013. 

The rate of input cost inflation picked up for the second successive month and was the sharpest in eight years. A depreciation in the value of the euro, especially against sterling, led to increases in the cost of imported items last month. 

"Overall, following the sharp weakening in the pace of construction activity recorded in January and February, the modest improvement in the March PMI is a welcome sign that the sector’s growth rate steadied at the end of the first quarter," Simon Barry said.

"Nevertheless, it remains the case that the rate of expansion in March was a good deal weaker than that seen last year, consistent with a notable loss of momentum in the sector’s recovery so far this year relative to the very strong growth recorded in 2014," he added.