Construction activity picked up across the economy in July, but the rate of expansion was a touch slower than in the previous month. The latest figures in the Ulster Bank Construction Purchasing Managers' Index (PMI) show that construction firms linked the latest rise in business levels to new orders and efforts to meet existing deadlines.

The index, which measures the performance of construction companies on a monthly basis, produced a reading of 57.7 in July. This compared to 58.5 in June and 58.1 in May, with any reading above 50 signalling expansion.

Pat McArdle, chief economist at Ulster Bank said the main impetus behind the July activity boost came from civil engineering, which is approaching all-time highs in the index.

He noted that the rate of growth in housing had also picked up. "Confidence remains high with little sign of any slowdown in housing activity. It looks like the industry is on target to deliver another record level of house completions this year."

Commercial construction, although still growing, posted its lowest rate of increase since April 2004. This was enough to offset the other two components in the index and slow the overall rate of increase in the PMI.

A breakdown of the index showed anecdotal evidence suggesting that marketing campaigns and competitive tendering had led to new orders being won in the sector as a whole.

July was, however, the worst month for new business growth recorded since February 2004.

The rate of job creation in the sector was still robust, with a quarter of firms saying extra staff had been hired since June. Employment has risen in each month since September2003.

The index is seasonally-adjusted and thus takes account of factors such as holidays and student participation in the construction workforce.