THE Irish construction sector continued to shrink at the beginning of 2013 but the rate of contraction was the slowest since last May, according to a survey published today.
The Ulster Bank Construction Purchasing Managers' Index found that activity, new orders and employment all contracted during the month but business sentiment improved.
The overall index came in at 45.8 in January. That was better than the 43 seen in December but still points to a sharp fall.
Anything below 50 signals the sector is shrinking.
Optimism at Irish construction firms reached the highest levels seen since last June.
Managers at construction companies attributed the improvement in positive sentiment to improving economic conditions.
"While it remains the case that activity levels continue to decline, the pace of decline eased to its slowest since May 2012," said Ulster Bank economist Simon Barry.
The housing and commercial construction sectors were the best performers, while civil engineering was the worst as the Government continues to rein in spending.
Housing activity decreased at the slowest pace in a year; a sign that the sector may be close to the bottom.
Lower workloads led building firms to reduce their employment again in January, Mr Barry said.
Staffing levels have fallen in each month since May 2007.