Ireland’s manufacturing sector showed an improvement in August, expanding for the third successive month, as new orders grew at the fastest pace in 14 months.

Improving demand in both domestic and export markets was reported by co mpanies, leading to an increase in new orders in August, according to the Investec Purchasing Managers' Index (PMI), a seasonally adjusted measure of the health of the industry.

Although backlogs of work continued to decline in August, the rate of depletion slowed for the second month running and was only slight. Moreover, the reduction was the weakest in 17 months.

The overall index continued to rise above the 50 no-change mark that separates expansion from contraction, standing at 52.0 in August, up from July’s outturn of 51.

“The headline PMI came in at 52.0 in August, representing the third successive rise in monthly activity and the fastest pace of expansion since November 2012,” Investec chief economist Philip O’Sullivan said.

He said a highlight of recent manufacturing PMIs has been the employment component, with August seeing a further rise in staffing levels in response to higher workloads and new product investment.

“Less helpful were movements in prices. Output prices, which had increased in two of the previous three months, recorded a very marginal decline during August,” he added.