Output increased for the 12th month running, with the rate of expansion remaining sharp despite slowing from the previous month.
Higher sales was the main factor leading to an increase in production, according to the latest Purchasing Managers’ Index for the sector.
Philip O’Sullivan, of specialist bank Investec, said the report signifies another sharp monthly improvement in business conditions.
“The key highlight within the report is the employment component, which expanded at its fastest pace since December 1999,” said Mr O’Sullivan. “The latest improvement in hiring activity stems from increased workloads, with the New Orders component having recorded above-50 readings in each of the 11 months.”
The seasonally adjusted PMI recorded a reading of 55 in May, down from April’s reading of 56.1. Anything above 50 signals expansion.
New orders increased at a solid pace, helped by the launch of new products.
The rate of growth in new export business is the strongest since last October, with the UK highlighted as a key source of new orders.
Higher staff levels helped firms to reduce backlogs of work.
“Taken together with recent positive Services PMI and Construction PMI readings, today’s Manufacturing PMI report provides a further reminder of the strong momentum across much of the private sector in Ireland,” Mr O’Sullivan said.
Meanwhile, the pace of growth in the US manufacturing sector accelerated in May and construction spending rose for a third straight month.
The US economy sank in the first quarter under the weight of a brutally cold winter and a slow pace of restocking by businesses. But businesses appear to rebuilding inventories, with new orders at factories hitting a five-month high in May.
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