Manufacturing showed further growth in June, but the rate of improvement slowed compared to the previous month, according to new figures.

The NCB purchasing managers index registered 53.7 in the month, down from 54.5 in May. A reading above 50 indicates expansion.

The volume of new businesses climbed for the tenth consecutive month, although at a weaker level than in May. Major export destinations were the US, Asia and Britain.

There was a modest upswing in manufacturing employment, with companies taking on additional staff to meet rising workloads.

In a number of cases, productivity gains allowed firms to raise output at a greater pace than employment.

Shortages of raw material on international markets, particularly steel, boosted supplier pricing power as well as having an inflationary impact on costs. In tandem with higher fuel prices, this pushed average input costs up in June.

A knock-on effect was higher prices charged, although strong competition ensured that the rate of output price inflation remains well below that of costs.

These increases encouraged manufacturers to raise production levels in the month. As a result, the volume of outstanding work declined for the third month running.

In order to meet higher production levels, panel firms increased purchases of raw materials and semi-manufactured goods.

However, inventories of purchases were eroded for the third month in a row, suggesting buying was being carried out on a just-in-time basis.

Mr Eunan King, NCB chief economist, said: "Overall, the survey outlines the continuation of a satisfactory pace of growth in the sector."