A marked decline in construction activity in August has been blamed on poor weather and lack of confidence as a result of mass construction job losses.

The figures released from the Ulster Bank Construction Purchasing Managers' Index (PMI), also shows the lowest reading for more than four years, registering 43.8 from 47.5.

Commenting on the survey, Pat McArdle, chief economist at Ulster Bank said: "A weak housing sector in August was expected but the readings for commercial and civil were surprisingly low. The only unusual factors were the weather which was the poorest for many years and the general sense of gloom that prevailed as reports of construction lay-offs were plentiful.

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"The PMI confirms that August was the first month of significant employment falls."

He continued: "On the other hand, the forward looking PMI components were more positive. New orders are no longer contracting significantly and confidence has again turned positive. It is too early yet to say that the bottom has been reached but the next few months will bear watching to see if housing levels out and civil and commercial regain momentum.

"Certainly, the latest Exchequer returns show that Government capital spending, a major influence on civil, continues unabated."

Construction companies, in the month of August, registered the sharpest reduction in housing activity in the survey's history; with almost half the firms surveyed noted a decline on the precious month.

(JM)