DUBLIN: The latest Ulster Bank construction purchasing managers index shows that construction activity in Ireland fell for the 35th month in a row in April and remained under the breakeven level of 50.

However, the index rose marginally to 45.5 last month from 45.2 in March. This rise marked the fourth increase in a row and the index now stands at its highest level in two and a half years.

Ulster Bank says the steepest fall in activity was seen in the commercial sector, with that index falling to 39.6 from 43 in March. The housing index rose to 43.5 from 42.4, while the civil engineering index increased to 42.5 from 37.4.

Companies said that the latest reduction in activity was mainly due to a fall in new business. The rate of decline in new orders accelerated while companies also reported intense competition.

Ulster Bank said that despite the problems the industry is experiencing,  the level of sentiment last month was the strongest since March 2007. Companies expect activity to be higher in a year's time than current low levels as the wider economy begins to recover.

Ulster Bank's chief economist Simon Barry said the construction sector is the 'clear laggard' in terms of the sectoral recovery stakes, as both the manufacturing and services PMIs have seen a return to positive growth in the past couple of months.

"Construction is not benefiting from the global recovery to the same extent as other areas of the economy, but there is some encouragement to be taken from the less negative trajectory which has emerged so far this year," he said.