Activity in the construction sector here fell for the third month in a row in January. The Ulster Bank Construction Purchasing Managers Index posted a reading of 35.3 last month, its lowest reading in the survey's history.

The key 50 mark divides contraction from an expansion in activity. The index has now been below that level since June 2007.

For the second month in a row, activity declined in all three construction areas monitored by the survey - housing, commercial and civil engineering. Housing remained the worst performing of the three, as the rate of contraction of activity was again a survey record at 23.1.

The commercial sector witnessed the sharpest fall in activity since July 2003 and posted a reading of 42.8, down from a reading of 45.6 in December. Civil engineering activity declined at a moderate rate that was still weaker in December. It posted a reading of 47 points in January, compared to 45.4 in December.

Building firms recorded a further substantial fall in new orders last month, which was blamed on a general deterioration in demand and greater competition for contracts out to tender.

Employment in the construction sector also declined at a record pace as firms adjusted to lower activity requirements and reduce new order volumes, Ulster Bank said.

Irish builders remained pessimistic in January, with 36% expecting a decline in activity in a year's time. Negative sentiment was the strongest since July 2003, as many companies predict that conditions in the industry will deteriorate further this year.

'It is now clear that the decline in construction activity accelerated in recent months and the January number is a low for the series which began in June 2000,' commented Pat McArdle, chief economist at Ulster Bank.

RTE.ie, 11 February 2008