Operating conditions in the Irish manufacturing sector continue to improve, reflecting increased production and purchasing and continued growth in incoming new orders, particularly from North America, according to the latest survey by NCB.

NCB's Purchasing Managers' Index (PMI) - an indicator designed to provide a single-figure measure of the economic health of the manufacturing industry - stands at 54.7, a slight drop from last month's index of 55.2, but still showing a continued rise over the last 12 months.

Any figure above the 50 mark signals expansion within the industry, and the overall index is derived from individual figures in a number of categories.

The marked growth in new orders (56.4) from both domestic and international clients led to an increase in output and backlogs of work declined. However, the increased pressure on suppliers led input costs to rise faster than wholesale prices, and may be squeezing manufacturers' margins.

Input costs (61.7) were also affected by high oil prices and shortage of raw materials such as steel, brass, polystyrene and plywood. Delivery times were down at 44.4.

Employment showed slightly slower growth at 51.1.