ACTIVITY IN the Irish construction sector slowed last month to its lowest level since data was first collected in June 2000, according to a survey from Ulster Bank.

The bank’s Construction Purchasing Managers Index recorded a figure of 25.7 in January, a record low.

Any figure below 50 indicates a decline in activity and the survey indicates the construction sector has contracted each month since June 2007.

“The weakness is now being driven by commercial activity and also by civil engineering, which is rapidly falling off,” said Pat McArdle, Ulster Bank’s chief economist .

The steepest fall in activity was registered in the commercial area, where the index declined to 24.1 in January from 25.9 in the previous month.

This contrasted with the previous two months, when the housing sector showed the sharpest contractions.

Housing activity fell for the 27th successive month, while civil engineering activity fell at the sharpest rate since August 2003.

Input prices fell for the fifth month in a row, reflecting increased levels of competition. The pace of job cuts accelerated as Irish firms reduced staffing levels in response to lower activity requirements.

“Labour shedding was obvious with the employment index falling sharply and confirming that construction was again a significant contributor to the very steep rise in the live register in January,” Mr McArdle said.

“On the other hand, the cost of inputs index also hit a record low, indicating that competition and currency strength are driving down prices. This also showed up in rates paid to subcontractors, which fell sharply. Needless to say, panellists remained pessimistic regarding the future, but a steady 20 per cent feel that things will be better in a year’s time.”