The manufacturing sector had its best period of growth in almost two years in April, according to the latest NCB Purchasing Managers' Index (PMI).

Data released yesterday showed that the average manufacturing company has now grown for each of the past 32 months. The pace of expansion last month was well ahead of that recorded in February and March.

"A sharp improvement in the rate of growth in new orders - and especially export orders - was a significant factor in the recovery," said Dermot O'Brien, chief economist with NCB.

Mr O'Brien pointed out that employment growth had also resumed, with the rate of increase at a 15-month high.

The overall index produced a reading of 54.1 in April, up from 52.6 in March. A reading above 50 signals expansion.

Production levels in the manufacturing sector increased at the sharpest pace in five months, with more than one-third of respondent firms reporting higher output.

New orders climbed to the highest level recorded since November last year, with a number of firms noting improved demand from US clients.

April also brought the biggest rise in input costs for 16 months, however. Companies noted higher prices for oil and oil-related products, leading them to charge higher prices to their customers. NCB said output inflation was "robust", albeit not as strong as growth in input costs.

Employment increased at a moderate pace in April, having declined in the previous two months. Respondent firms said they had hired new staff in response to growth in new orders and as part of an effort to attract business. This part of the index reached a 15-month high.

The Irish surge in manufacturing was mirrored around the world, with global manufacturing activity rising to a 20-month high in April and firms taking on more workers.

Inflationary pressures continued to mount elsewhere too, however, based on the latest global manufacturing index from JP Morgan. The index increased from 55.2 to 55.9 over the month.

Within this, euro-zone manufacturing rose to 56.7 from 56.1, buoyed by a broad-based upturn in demand, exports and employment.

The UK PMI unexpectedly grew at its fastest pace in one and a half years, rising to 54.1 from a revised 51.0 in March.

The equivalent US survey, released on Monday, showed manufacturing activity jumped to 57.3 last month, its highest level since September. - (Additional reporting, Reuters)