The pace of expansion in construction activity eased in March, the latest Ulster Bank Construction Purchasing Managers Index shows.

The index eased to 55.9 in March from 60.5 in February, but Ulster Bank said this follows a very strong February performance and the still-robust level of the PMI signals that Irish construction continues to expand at a solid rate. 

The index – which covers housing, commercial and civil engineering – shows that demand for construction workers continues to be underpinned by new business which continued to rise solidly in March. 

For the third month in a row, the housing sub-category recorded the fastest rise in activity of the three sectors in March. 

Commercial activity also increased solidly over the month, but growth eased notably from February. 

But civil engineering activity declined for the seventh consecutive month and at the fastest pace since November 2018.  

Ulster Bank noted that new order growth eased slightly in March from February with companies said they faced solid demand conditions for construction projects. 

New business inflows among Irish construction firms have now increased in each of the past 69 months, the bank added.

Employment growth in the construction industry quickened to an eight-month high last month and Ulster Bank noted that the rate of job creation was steep amid reports that extra staff had been hired in order to keep up with customer demand.

Simon Barry, chief economist at Ulster Bank, said the demand for construction workers continues to be underpinned by new business which continued to rise solidly in March, though at a slightly slower pace than the very rapid rate recorded in February. 

"Firms themselves remain optimistic about the coming year, with 43% of respondents anticipating higher output levels over the year ahead, with expectations of stronger customer demand cited as an important source of support," Mr Barry said,

However, he noted that sentiment about the sector's prospects did moderate slightly in March. 

"This was amid reports from respondents that Brexit risks and uncertainties are weighing on perceptions of the construction outlook, albeit that the March PMI survey results indicate that construction continues to outperform both manufacturing and services where Brexit risks are more pronounced," the economist added.