The manufacturing sector shrank for the 11th month in a row in August, according to the latest NCB Purchasing Managers' Index.
The index rose, however, to 48.1 from 45.8 in July, its highest level for four months. NCB economist Eunan King said the PMI showed a 'marked bounce' to the highest level since April.
'This would appear to be in response to an improving situation both in the domestic and foreign economies,' he added.
The survey showed only a modest decline in new orders in August, but new export orders fell for the 13th successive month despite a weaker euro in the second half of the month.
Input prices rose marginally for the first time in four months, because of the weaker euro and higher agricultural prices, but firms again reduced prices in response to intense competition.
The employment index fell again, though the rate of job cutting was the slowest for seven months.
