Activity in Irish manufacturing companies improved again in May as output saw a return to growth and the expansion in new business continued.
Companies also took on extra staff last month to deal with increased workloads and the rate of job creation was solid.
However, cost inflation remained high amid rising fuel prices and other oil-related products.
The NCB purchasing managers index rose to 51.2 in May from 50.1 in April. Any figure over 50 signals growth in an area, while a figure under 50 signals contraction.
The index has been over 50 for the past three months.
NCB said that the most surprising aspect of the report was the fact that the employment index rose for the third month in a row, which means that more firms increased their employment levels than cut jobs.
Today's survey reveals that new business at manufacturing companies increased for the fourth month in a row in May, with firms linking the growth to higher new export orders. New business from overseas rose at a solid pace as companies were able to generate sales from outside the troubled euro zone, NCB noted.
The higher level of new orders led firms to increase production last month and output rose slightly after a fall in April. Production has now risen in three of the past four months.
Companies also increased their headcounts for the third month in a row in May and NCB said the pace at which staff were taken on was the fastest since March 2011.
However, the survey also noted that the rate of inflation of input prices remained sharp in May. The rises were mainly due to higher costs for fuel and other oil-related products. But strong competition largely prevented companies from passing on increased costs to customers and prices charged were actually reduced marginally.
Referring to the higher employment levels, NCB's chief economist Brian Devine said there was a 2.4% quarter on quarter increase in industrial employment in the fourth quarter of 2011. ''The evidence from the PMIs would suggest that this trend has continued into the first quarter of 2012,'' he added.
