There was a further contraction in activity in the Irish construction sector in January, but cost and supply pressures showed signs of easing.
According to the latest Purchasing Managers' Index compiled by BNP Paribas Real Estate Ireland, subdued market conditions remained a constraint on overall performance in the sector.
However, the rates of reduction for both output and new orders "softened notably" from December, the report said, and there was another increase in staffing numbers.
On the cost side, the rate of input cost inflation eased to a two-year low.
However, sub-contractor rates increased at an accelerated and marked pace, the report noted.
The combination of the various factors saw the headline seasonally adjusted Total Activity Index moving to 47.7 in January, up from 43.2 in December.
It represented a fourth successive monthly reduction in overall construction output here.
However, the latest decrease was notably weaker than in December and the softest since the current downturn first began last October.
The contraction was broad-based across sectors with civil engineering firms recording the strongest decline.
Commercial activity saw a slight fall while housing activity declined for the fourth month in a row.
Many firms said they struggled to secure new orders and registered another contraction in January.
Irish constitution companies added to their workforces for the first time in three months, albeit only marginally.
Supply pressures eased in January, highlighted by the softest lengthening in lead times since February 2020.
The report's author, John McCartney, Director of Research with BNP Paribas Real Estate Ireland, attributed it partly to the recent reopening of the Chinese economy following strict Covid-19 lockdowns.
"There are positive signs for the year ahead," Mr McCartney said of the overall industry performance.
"The relaxation of bank and local authority mortgage rules, and the raising of price caps in the Government's shared equity scheme will give builders greater confidence in future selling prices. Meanwhile the new Renter Tax Credit and a widening of the net for social housing support will help underpin the rental market," he added.
"With confidence at an 11 month high, housing commencements have picked-up strongly in recent months, construction firms have resumed hiring, and 85% of builders now expect to be as busy or busier in one year's time," Mr McCartney concluded.
