The Irish construction sector continues to contract, but rates of decline in activity, new orders and employment all eased last month, according to the Ulster Bank construction purchasing managers’ index.

Business sentiment also improved during the month, the index suggests.

Civil engineering remains the weakest sub-sector in construction, with the contraction accelerating in January.

“A weak start to the year for exchequer capital spending is probably a contributory factor here,” said Ulster Bank economist Simon Barry.

Reductions in activity on both residential and commercial projects were less pronounced.