Activity in Irish manufacturing firms improved again in August to mark the third successive month of expansion in a row.

Investec's monthly Purchasing Managers' Index continued to rise above the 50 no-change mark last month with a reading of 52 in August, up from July's reading of 51.

This was also the fastest pace of expansion since last November.

The improvement was led by an improvement in new orders, which grew at their fastest pace in 14 months.

Investec said that companies reported stronger demand in both domestic and export markets, while some firms said that their marketing efforts had resulted in new business during the month.

Employment levels rose in response to higher workloads and new product investment during the month, although the rate of job creation slowed somewhat from the previous month.

Output prices were broadly unchanged in August after a slight rise in July. Although some companies reported passing on higher input costs to their clients, this was balanced by others that lowered charges due to competitive pressures.

“Today’s Investec Manufacturing PMI Ireland report shows a welcome pick-up in activity in the Irish manufacturing sector,''' commented Investec's chief economist Philip O'Sullivan.

“A highlight of recent Manufacturing PMIs has been the employment component. August saw a further rise in staffing levels in response to higher workloads and new product investment, bringing the latest sequence of growth to three successive months,'' the economist noted.

He also said that the recent improvement in new business has had a knock-on impact on the backlogs of work component, where the rate of contraction was the weakest in 17 months.