Conditions in the manufacturing sector improved in the month of May, bringing AIB's monthly measure of activity to a record high as economies re-open following the easing of Covid restrictions.

AIB said the Purchasing Managers' Index jumped to 64.1 from 60.8 in April - a new high since the survey began in 1998.

Any figure greater than 50 indicates overall improvement of the sector.

It is derived from indicators for new orders, output, employment, suppliers' delivery times and stocks of purchases.

Oliver Mangan, AIB's chief economist, said the sub-components of the Irish PMI survey all point to rapidly improving business conditions in manufacturing.

"Output rose at a record pace, driven by rebounding demand, with record growth in new orders as businesses re-open, both domestically and in overseas markets," he explained.

"As a result, backlogs of unfilled orders also rose at a record pace, while inventories of finished goods fell.

"Meanwhile, employment rose for the eight month running, growing at the second fastest rate on record," he said.

Mr Mangan said Ireland is participating in a global boom in manufacturing.

"The Irish data is very much in line with record or near-record flash May manufacturing PMI readings for the UK, euro zone and US of 66.1, 62.8 and 61.5, respectively, as the recovery in the global economy gathers momentum," he said.

The PMI shows that supply chains remain under pressure, with 60% of firms reporting even longer delivery times than in April, due to new UK Customs arrangements, transport delays in shipping and raw materials shortages.

"These factors, combined with strengthening demand, saw further marked upward pressure on prices," said Mr Mangan.

Input prices increased at their fastest pace in ten years, while output prices rose at a series-record pace.

The 12-month outlook for production remained close to the record high hit in April.

"Firms expect vaccination programmes to lead to a full and permanent reopening of economies, providing a major fillip to business activity," Mr Mangan said.