The country's manufacturing sector grew slightly for the second month in a row in February after a big dip at the start of the year as Brexit and a third Covid-19 lockdown of the economy hit output and new orders.

The AIB IHS Markit manufacturing Purchasing Managers' Index (PMI) edged up to 52 from 51.8 in January.

This was above the 50 level that separates expansion from contraction but well down from December's reading of 57.2. 

Last month's reading was still far higher than the 36 recorded during the initial lockdown of the economy in April. The manufacturing sector has been allowed to operate during subsequent lockdowns. 

Output and new orders fell for the second month in a row while supply chains remained under severe pressure, with Britain's exit from the European Union's trading area widely cited as the main cause of delays.  

Rising administration and transport costs as a result of Brexit as well as upward pressure on raw materials prices are also generating more inflationary pressure, companies added.  

However, employment in the sector continued to rise and sentiment remained strong as firms looked beyond the crisis to a revival in demand later in 2021. 

"Tight Covid lockdown restrictions, both here and elsewhere, are creating a challenging backdrop for businesses, with firms reporting weak demand and thus falling new orders in Ireland and from the UK," AIB's chief economist Oliver Mangan said. 

"On a more positive note, firms expect the rollout of Covid vaccines to bring an improvement in economic conditions as lockdown restrictions are lifted during the course of the year," he added.