New research by Ulster Bank suggests activity in the Irish construction business fell in February to its lowest level since the bank began surveying the sector in 2000.

Ulster said that activity levels measured by its construction purchasing managers index fell to a new survey low for the third month running in February, when activity measured 35 on its composite index.

An index reading below 50 signals a decrease in activity on the previous month.

The activity rate in the sector had declined to 35.3 in January from 35.7 in December

But while the decline in February was the the ninth successive decline in the monthly survey, Ulster's chief economist Pat McArdle said confidence in the sector appeared to be picking up.

The fall in February was "marginal" when compared to the decline in activity in January, he said.

"In broad terms, the sector again contracted sharply but the rate of decline did not accelerate. This reflected a slightly better tone in a number of areas," he said.

"The decline in housing, for example, was less than in any month since last September.

"Commercial activity, too, was slightly less negative but there was a further marked deterioration in civil engineering.

"The somewhat less negative overall tone was also evident in new business volumes and employment, giving some hope that it may continue next month," Mr McArldle said.

The reading of civil engineering activity was 36.9, down from 47. The reading for commercial activity was 43.7, up from 42.8 but still in negative territory. The reading for housing activity was 27.5, up from 23.1 but also in negative territory.

"Sharp falls over the turn of the year were reversed as this index moved back into positive territory, indicating that firms expect activity to be slightly higher in a year's time," Mr McArdle added.