The rate of growth in activity in the construction sector slowed in August for the second month in a row, a new survey shows.

The Ulster Bank Construction Purchasing Managers' Index posted a reading of 56.5 in August, down from 59.1 in July but still showing a sharp monthly rise in activity. 

A figure over 50 signals  growth, while under 50 signals contraction.

Ulster Bank said that total output has increased continuously throughout the past two years, but the pace of expansion has eased from a near record level in June. 

The index studies three sections of the building industry - residential, commercial and civil engineering. 

The commercial sector remained the best-performing of the three sectors last month, posting a substantial monthly increase, albeit the weakest since March. 

Residential activity eased for the second month in a row and recorded the slowest pace of growth in five months. 

Civil engineering activity also decreased for the second successive month and although modest, the rate of contraction was slightly sharper than that seen in July.

Ulster Bank said that growth of total activity in the building sector was supported by a further expansion in new business. 

It noted little sign of a slowdown in growth of new work as the rate of expansion was broadly in line with the previous month. New orders have now increased in each of the past 26 months.

The rate of job creation was also little changed from the previous month and remained strong. About 24% of respondents took on extra staff and companies linked their higher headcount to rising workloads.

The August data showed another harp increase in input prices, due mainly to the weakness of the euro against sterling.

Business sentiment among construction companies remained strongly positive amid predictions of ongoing new order growth. About 58% of companies surveyed said they expected activity to increase over the coming 12 months.

"The latest results of the Ulster Bank Construction PMI indicate that the Irish construction sector experienced a further solid rise in activity in August, albeit that the pace of growth moderated since July," commented Ulster Bank's chief economist Simon Barry. 

He noted that the headline PMI fell for the second month in a row in August, but these declines are from what was the second-highest reading in the survey's history in June. 

Mr Barry said that the latest official jobs statistics from the CSO indicate that construction was the fastest-growing sector of the economy in terms of job creation in the year to the second quarter. 

"The July and August readings of the employment index of the PMI survey indicate that the sector has continued to generate strong jobs growth since then," he added.