The construction sector has remained buoyant despite signs of a slowdown in the residential sector, new figures from Ulster Bank show.

The sector expanded for the thirty-seventh month in succession in September, as indicated by the Ulster Bank Construction Purchasing Managers' Index (PMI) index.

The seasonally adjusted index - designed to measure the overall performance of the construction economy - registered at 56.9. Commenting on the survey, Pat McArdle, chief economist at Ulster Bank, said: "Responses to the PMI survey show that the construction industry continues to expand, driven by strong new orders. This is putting suppliers under pressure and delivery times lengthened further.

"This may also explain the surprisingly strong increase in costs in September, a month when oil prices fell sharply and costs elsewhere generally fell. Employment growth is robust and confidence remains strong."

He said definitive signs of a slowing in the housing sector were appearing.

In terms of construction itself, activity growth was recorded in all three construction areas monitored by the survey. Civil engineering was the best performing area for the fourth month in a row as activity increased sharply. Commercial activity rose at a robust pace, while housing was the worst performing area despite a solid increase in activity during September.

New order volumes at Irish construction firms rose sharply in September. Anecdotal evidence indicated that marketing initiatives and a general improvement in demand supported greater new business levels. New orders have now increased in each month since September 2003.