Growth in new business in the construction sector increased at the fastest level in almost a decade in July, with activity in the housing sector accelerating at the fastest rate in the 15-year history of the Ulster Bank Construction Purchasing Managers' Index.

Employment in the sector continued to rise – for the 11th month in succession and at its fastest rate in three months. Demand for subcontractors, in particular, increased sharply.

That led to the sharpest jump in the rates charged by subcontractors since November 2004.

Overall, activity in the sector rose to 62.6 in July from 59.9 in June – any figure above 50 indicates expansion.

Further evidence of growth in the residential construction market is contained in the National Housing Construction Index.

Produced by Link2Plans, it measures project commencements – as notified by developers to local authorities – and planning applications.

Figure for the second quarter of this year, published today, show a two-thirds increase in work on new housing projects compared to the same period last year and a 19 per cent jump in planning applications.