Construction activity remained strong in August, underpinned by continued growth in new orders.

The latest figures in the Ulster Bank Construction Purchasing Managers' Index (PMI) show that the volume of new orders received by Irish construction firms rose strongly in August.

More than a third of firms indicated that new work had increased since the previous month. New business has now expanded in each month since September 2003.

The index, which measures the performance of construction companies on a monthly basis, produced a reading of 57.8 in August. This compared to 57.7 in July and 58.5 in June, with any reading above 50 signalling expansion.

"Confidence in the industry remains high, albeit at the least marked level for nearly a year," Pat McArdle, chief economist at Ulster Bank, noted.

"At the same time, activity, new orders and employment all continue to expand quite strongly."

A breakdown of the data showed that civil engineering again expanded at the sharpest pace of all construction activity although it slowed slightly from July's 20-month high.

Commercial and housing activity remained robust, Ulster Bank said.

The sector also recorded employment growth for the 36th successive month as increased workloads saw more employment in construction.

On the downside, the survey showed that input price inflation remained sharp. Many firms mentioned that the price of metals and fuel had increased while around two-fifths of firms reported that input prices had risen since July.