Ireland’s manufacturing sector ended 2015 on a positive note with operating conditions strengthening for the 31st consecutive month in December, according to a new survey.

According to Investec’s monthly Purchasing Managers’ Index (PMI), an indicator of the health of the manufacturing industry, the headline PMI reading for December rose to 54.2, the highest reading in five months. The headline PMI reading for November was 53.3.

The new orders sub-index continued to increase, as it has done for the past two-and-a-half years. The rate of expansion in December was the fastest since July and one-third of survey respondents reporting advance orders for 2016. As has been the case in each month since July 2013, new business from abroad also increased during December.

The employment index also rose, albeit at the slowest pace since August 2013. Investec said that despite the slower pace of expansion, the outlook for employment in the manufacturing sectors remains positive.

The index shows that input prices decreased for the fourth successive months in December while there was a marginal rise in output prices. Manufacturing output continued to increase last month, with the rate of growth picking up for the second month running to the sharpest since August.

Backlogs of work rose in December, ending a four-month sequence of depletion. The rise in outstanding business was the strongest since February.

The latest survey shows a sharp and accelerated increase in buying activity, with the quantity of purchases index expanding at its fastest pace in five months.

“While this segment is, understandably, highly correlated with new orders, we would highlight the fact that manufacturing firms reported growth in stocks of purchases for only the second time in the past 10 months in December. This suggests confidence on their part around the prospects for further increases in workloads,” said Investec’s chief economist Philip O’Sullivan.