ACTIVITY IN the Irish construction sector fell at a "considerable pace" in October while employment was also "cut sharply again", according to the latest Ulster Bank Construction PMI survey.

Meanwhile, the latest Ulster Bank PMI survey in Northern Ireland found that business activity levels and employment fell again last month as the knock-on effects of the recession hit the private sector. However, there was a "significant easing" in the pace of job losses.

In the Republic, the Construction PMI survey measured activity at 34.5 in October, compared with 34.2 in September. Any rating below 50 indicates a decline in activity. The pace of decline in construction was led by civil engineering. Activity on these projects has now declined in each of the past 23 months.

Housing activity decreased at the slowest pace of the three categories but the reduction was still considerable.

Ulster Bank chief economist Simon Barry said: "The breakdown of this month's results reveals that employment continues to fall, as firms respond to weakness in orders and attempt to cut costs.

"At a sectoral level, commercial activity declined at an accelerating pace, while there was some modest easing in the rate of contraction in civil engineering and housing.

"The housing index rose to its highest level in 2 1/2 years - an indication that while the decline in activity in this area is still substantial, it is reversing some of the extreme weakness seen around the end of last year."

About one-third of respondents expect activity to be higher in 12 months, with economic conditions and banking sector liquidity forecast to improve. However, 31 per cent of those surveyed see activity falling due to the "continued fragility" of the wider economy.

In relation to the North, Richard Ramsey, the bank's chief economist in Northern Ireland, said the research shows the continued fall in business activity levels was at its "slowest rate" since the start of 2008.

"The most encouraging aspect of the latest survey was the significant easing in the rate of job losses," Mr Ramsay said.

"The pace of employment decline has not been as sharp as the UK for the past five months. In February, almost 30 per cent of Northern Ireland firms reported falling levels of employment. In October, less than half this number were till signalling job losses."

The latest Ulster Bank research reaffirms that many firms in the North are still struggling to win business in the current economic climate. New business orders placed at Northern Ireland firms fell in October, the 23rd consecutive month of decline recorded.

Although the pace of reduction was the second-weakest since last February, it contrasted with solid growth registered across the UK economy as a whole.

Originally published by CIARAN HANCOCK and FRANCESS McDONNELL.

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