The volume of work on residential housing projects fell for the second successive month in December, according to the latest Ulster Bank's Construction Purchasing Managers' Index.
For the construction sector as a whole, the index reported a score of 54.7, the 34th straight month that the sector has shown growth. However, the rate of growth has eased, and last month was the weakest during that time.
Commercial property performed best, followed by civil engineering.
Pat McArdle, chief economist at Ulster Bank, said: "Construction had another good year in 2006, but the average rate of expansion was down slightly on 2005 which, in turn, was below 2004.
Housing was the laggard - it grew strongly on average but was retarded by a poor last quarter when it contracted marginally.
"December was the second month in a row when housing activity fell. Though the readings were taken after the budget, it was clearly too soon for any positive impact to be felt. It is likely that there was an outright fall in house prices in December - the last time this occurred was in late 2001.
In a separate report, the Central Statistics Office reported a 2.6 per cent rise in the number of people employed in the sector in November 2006, compared with the same period the previous year.