CONSTRUCTION ACTIVITY in the Republic fell by the sharpest pace in 16 months in September, as new orders slipped again and led to a further decline in employment in the sector.

The Ulster Bank purchasing managers’ index (PMI) for the sector shows that, after two months of a moderating rate of decline, the downturn in construction accelerated again last month, amid weak confidence.

Ulster Bank economist Simon Barry said there was “no let-up” in the contraction in the industry, as a “dearth of new business opportunities” meant work remained “scarce”.

The housing sub-sector endured a particularly weak September, the index suggests. “Not only is activity continuing to fall – as it has done for nearly five years now – but the pace of decrease reached its sharpest since January 2010,” said Mr Barry.

Housing has now overtaken civil engineering as the weakest link of the three sub-sectors. Commercial activity is also contracting, but at a slightly less pronounced rate.

The index fell to a reading of 40.1 in September, far below the 50 threshold that marks the point between contraction and expansion.

However, Mr Barry also pointed to an ease in the rate of decline in new orders, describing it as “a hint that the multi-year slump in construction activity may finally be approaching a bottoming out phase”.

Further job losses are likely before any stabilisation can take hold, he added. Employment in the industry fell for the 53rd consecutive month in September as incoming work levels were not enough to compensate for work at existing projects being completed.

Higher prices for fuel, oil and steel also contributed to a rise in input costs during the month, while sentiment in the industry fell to its lowest level since January.