DECEMBER SAW the largest overall fall in construction activity in years, Ulster Bank said yesterday. It said the figures for December for its purchasing managers' index for the sector indicated the steepest fall in activity since it began collecting data in June 2000.

The bank's seasonally adjusted index recorded a figure of 27.4 for December, with anything below 50 indicating contraction. The figure for November was 32.1. More than 56 per cent of respondents indicated lower activity during the month, while only 9 per cent indicated a rise. Housing activity recorded a figure of 23.1, commercial activity a figure of 25.9, and civil engineering a figure of 33.7. Commenting on the survey results, Pat McArdle, chief economist with the bank, said the fall in the index of almost five points in December mirrored a pattern that was evident across Europe. The composite index for France, Germany, Ireland, Italy and the UK reached a record low in December. "We are not unique. The UK housing index is now quite close to the Irish one having begun to fall much later, but rapidly catching up . . . Both France and Italy are also below 30. German new house construction is holding up better but is still well below 50, ie contracting, as indeed it has been for most of the past decade." He said respondents were pessimistic regarding the future, citing falling demand as well as lack of credit. "At this stage, it is a moot point as to which is the more important." The rate of contraction in the housing sector was a survey record.