The number of large extensions and new housing developments being built dropped by 8% last year.
Latest figures revealed just 5,297 projects started nationwide in 2012, down from almost 5,750 in 2011.
However six counties bucked the trend, including Westmeath where the number of developments soared by 39%.
Works featured in the national housing construction index include all home builds from extensions that need planning permission and detached homes to housing estates. Elsewhere it showed the number of people applying for planning permission dropped in every country nationwide, except in Donegal where it jumped by 20%.
Danny O'Shea, managing director of Link2Plans which compiled the report, said the index reveals a slow down in the rate of decline in planning applications and commencements.
He said: "This is a trend that we saw in previous volumes of our index. Looking back at the whole of 2012, the numbers show that while commencements are down 8%, six counties all saw an increase. If these trends continue into 2013, we could expect to see numbers potentially rising in the first half of this year which is potentially very positive news for the sector as a whole."
Link2Plans said commencement notices give a real time report of construction activity, as one must be issued to a local authority within a month of work starting.
The largest fall in notices was recorded in Roscommon (-30%), Laois (-27%) and Donegal (-27%), while there were increases in Westmeath (39%), Mayo (29%), Sligo (25%), Cork (6%), Wicklow (6%) and Kilkenny (1%).
Elsewhere planning applications fell in every county except Donegal, where they rose from 1,067 in 2011 to 1,277. The largest percentage drop was experienced in Kildare (-34%), Kerry (-32%) and Clare (-32%). In Dublin planning applications were down by 252 (10%) and commencement orders by 55 (5%), while in Cork the figures were down 500 (-21%) for planning applications but 33 extra building projects started.
Mr O'Shea said the register contains tentative signs of hope for residential construction sector. He added: "While there was a fall in both applications and commencements, the fall has slowed down."