FEBRUARY DATA pointed to a further considerable deterioration in operating conditions in the Irish construction sector, with substantial falls in activity, new orders and employment, Ulster Bank said yesterday.

The bank’s construction purchasing managers’ index came in at 28.2. A standstill in the sector in February compared to January, would create a score of 50.

The score indicates a substantial reduction in activity, despite rising slightly from January when the reading was 25.7. The contraction was largely due to falling new business.

Commenting on the survey, Pat McArdle, chief economist at the bank, said the slight uplift was probably “statistical noise”.

“It could be a sign that the commercial index, which has fallen sharply, might be about to level off, just as housing did more than a year ago. However, civil activity is likely to continue to fall as the Government’s capital spending comes under increasing pressure.

“The employment index remains close to record lows and the true state of the construction industry is also reflected in record low readings for input prices and rates charged by subcontractors. At this stage, roughly half of those surveyed are reporting declining activity with slightly less than half reporting unchanged volumes and only a few expanding.”

Commercial and housing activity led the declines. For the second consecutive month, commercial activity fell more sharply than either housing or civil engineering activity. Moreover, commercial projects contracted at the third-fastest pace since data was first collected in June 2000.

The reduction in work on residential projects was only marginally slower than that of commercial activity. Almost 52 per cent of respondents indicated lower housing activity. Civil engineering activity fell for the 15th month in a row, although the pace of decline was less marked than in the other two sectors.