Irish construction sector activity recorded a "healthy" growth in January, according to the latest Ulster Bank Construction Purchasing Managers' Index (PMI).

New figures have revealed a 55.7 reading for January, down from 58.9 in the previous month, signalling a slower pace of expansion for the third month running.

However, activity growth is continuing in housing and commercial categories, while a fall was recorded in civil engineering activities.

New orders rose at a sharp but reduced pace in January, while staffing levels increase at their second-fastest pace on record, with 27% of respondents recording an increase.

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Simon Barry, Chief Economist Republic of Ireland at Ulster Bank, said the sector "remained comfortably" in expansion territory, despite the pace of growth slowing for a third consecutive month.

"Very encouragingly, Residential activity remains a particular bright spot with Housing activity continuing to rise at a rapid pace, while Commercial activity also very much remains in expansion mode, though the pace of growth has eased in recent months," he said.

"Civil Engineering continues to lag behind the other sectors, with respondents reporting a third consecutive monthly decline in activity. Respondents continue to judge the Irish construction outlook to be very favourable.

"Confidence about future activity prospects remained strongly positive in January amid further solid gains in New Orders, despite some easing in the rate of increase. Indeed, buoyed by the ongoing increase in work volumes, last month saw a substantial and accelerated rise in staffing levels with the rate of job creation picking up to its second-fastest in the survey's 16 1⁄2 year history.

"One note of caution stems from further evidence of building cost pressures with the rate of input cost inflation picking up to its quickest in almost 10 years."

(LM/JP)