Builders continued to feel the squeeze last month as the three-year decline in their industry continued, the latest figures show.
Ulster Bank's purchasing managers' index (PMI) for August showed that Irish construction activity continued to fall last month.
The index hit 48.4 – any reading below the benchmark of 50 indicates a fall in activity on the previous month, while any result above that figure signals growth in activity.
The index has fallen every month since July 2007, just after the building boom hit its peak. Last month was its 39th consecutive fall, marking the longest decline since the PMI was introduced earlier in the decade.
However, August's reading was better than July, when overall activity came in at 45.
Ulster Bank economist Lynsey Clemenger said this indicated that the rate at which the industry is declining is slowing.
"Even though activity is still contracting, the rate of decline continues to ease, with the headline index now at its highest level since May 2007," he said. "In addition, new orders rose for the second month running in August, but it is important to point out that the increase was very marginal.
"Nevertheless, this explains in part the continued optimism amongst construction firms that activity in a year's time will be higher than the extremely depressed levels that prevail at present."
Mr Clemenger added that these welcome signals should be seen in the context of a three-year period of extraordinary weakness in the building business.
The index shows that housing was the worst performer last month, coming in at 40.8. Commercial construction was strongest, with a reading of 46.
There was a slight pick-up in new orders, but most respondents said it remained extremely difficult to win new contracts last month. However, they did forecast it would be stronger in 12 months.