Irish construction activity continued to grow in March but at the slowest pace in eight months, a new survey shows.

The latest Construction Purchasing Managers' Index (PMI) from Ulster Bank shows that the sector recorded "robust expansion" in March, with an index reading of 56.6.

Although this was down from 59.2 in February and 60.2 in January, it remained well above the 50 level. Any rating above 50 suggests that activity increased, while a rating below 50 suggests a fall in activity.

Ulster Bank said recently-signed new contracts, along with the expansion of existing projects, helped underpin the latest rise in activity.

It also noted that a sharp increase in growth in civil engineering activity, the biggest pick-up in 15 months, helped offset weaker growth in housing and commercial activity.

"A year ago, civil engineering was in the doldrums, with Government capital spending massively undershooting. Now it is the strongest performing sector, with a reading of 62.5," Ulster Bank chief economist, Pat McArdle, said.

He noted that the March reading for commercial construction activity was a 23-month low, "a sign perhaps that much of the required increased capacity in this sector has now been provided".

The survey also found that new construction orders continued to expand sharply in March. Employment growth was also sustained for the 31st month in a row, although it fell below the average for the past 12 months. Use of sub-contractors increased but despite the increased demand, their availability rose for the sixth successive month while their rates remained unchanged after 31 months of increases.

The rising price of oil showed up in input costs, which rose strongly in March, with around a third of firms noting the increased cost of metal and fuels.

Finally, the survey reported a high level of optimism among Irish construction firms.