Activity in the construction sector slowed for the first time in almost four years in June, according to the latest Ulster Bank Construction PMI survey.
The survey, which measures the overall performance of the construction sector in the economy, found that the fall in activity was "marked".
New work fell for the third consecutive month and some firms said lower activity levels were due to "particular weakness" in the housing sector.
The index for total activity declined from 50.7 in May to 46.8 last month. Any reading below 50 signals a decrease in activity.
Data for June signalled the sharpest fall in housing activity at construction firms since the survey began in June 2000.
The index for housing activity declined from 37 in May to 32.5 last month. Commercial activity declined from 57.3 in May to 51.4 in June, while the civil engineering index was down from 55.6 to 50.6 over the same period.
"This indicates a very rapid downturn in output in the construction sector and in housing activity in particular," said Pat McArdle, chief economist at Ulster Bank.
According to the survey, 39 per cent of firms noted a fall in residential activity since the previous month. Mr McArdle said the decline in housing was not unexpected, although the rate of contraction was "exceptional". "It looks like builders have decided to pull back from new housing due to demand issues."
"This might be wise as the alternative is to keep building, which could lead to a price correction."
He said the changes in stamp duty introduced by the Government for first-time buyers would give a small lift to the market.
But he predicted further weakness in the autumn. "Interest rates will more likely than not rise again in the autumn."
