The Irish construction sector continued to contract in May, bringing the current period of decline to four years.

According to the Ulster Bank Construction Purchasing Managers' Index, the fall in activity in the sector gathered pace during the month, while new orders also fell at a faster rate compared to April. This was the ninth month in a row that new orders have fallen, and plays some part in helping to keep the sector depressed, Ulster Bank said.

The seasonally adjusted index, which is designed to track changes in total construction activity, fell to 41.1 in May from 43.7 a month earlier. Housing activity contracted to 37.6 last month, compared to 41.5 in April.

"The renewed signs of weakness evident last month were predominantly driven by a faster rate of decline in the housing sub-component, with activity here contracting by the most since February 2010. Commercial sector activity also fell at a sharper rate in May and while the rate of decline in civil engineering moderated a little, it remained the weakest of the three construction sub-sectors," said Ulster Bank economist Lynsey Clemenger.

As a result of the decline, companies lowered employment levels and purchasing, but input cost inflation still remained high mainly due to steel and oil related products.

"Given these factors, it is not surprising that even modest gains in construction employment continue to look some way off, albeit that the decline in staffing levels in May was the slowest since January," Ms Clemenger said.

However, the sector is looking more positively at the future, optimistic that business activity will be higher in 12 months' time. The survey noted that this positive sentiment mainly reflected hopes of a recovery in the wider economy.