The Ulster Bank Construction Purchasing Managers' Index stands at 59.1 for July and is above the 50-mark which indicates growth. However, it is lower than the 65.7 recorded in the month of June.
Those who responded to the survey blamed increased costs of importing items due to the weak euro, while suppliers were also under pressure from a rise in orders which impacted delivery times.
A rise in construction activity, new orders and employment were registered in July, the survey added.
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New orders have now increased for 25 consecutive months, with staffing levels also having risen in each of the past 23 months.
Simon Barry, Chief Economist, Republic of Ireland at Ulster Bank, said: "The overall PMI index did fall back a bit last month, but from what was an exceptionally strong reading in June and the July results signal that firms continue to experience rapid growth in activity.
"Mirroring the overall results, somewhat slower – but still solid – growth was recorded in both housing and commercial activity. The results for civil engineering were not as favourable, with activity here registering a decline in July, ending a three-month run of expansion."
He added: "Sentiment among firms rose notably last month, with over two-thirds of respondents expecting activity levels to rise further in the coming year.
"On-going improvements in both the wider economy and the construction sector itself were cited as supports for the upbeat assessment of the 12-month outlook.
"More generally, the July figures point to an encouraging start to the second half of the year, with construction sector recovery momentum looking healthy in the early part of the third quarter."
(JP)
