Strong demand drove continued growth in manufacturing in July, the latest figures show. The NCB Purchasing Managers' Index (PMI) hit 54.7 last month.

Any measure above 50 signals growth over the previous month, while any reading below that level indicates a contraction in activity.

NCB said that the 54.7 figure represented a slight easing on the 55.4 recorded in June, but chief economist Dermot O'Brien said the result shows that manufacturing remains buoyant.

"The recovery in manufacturing employment now looks more solid and is being supported by strong growth in output and orders," he said.

"The latest survey also shows some improvement in inflation pressures in the sector, with easier rates of increase in costs and output prices in July."

It was the 35th month in a row in which the manufacturing PMI recorded growth.

Manufacturers in the Republic said there was strong growth in new orders during the month. The new orders index reads 56.1, more than a point below the record 57.3 recorded in June.

NCB said companies linked the increase in new orders to growth in demand.

"Expansion of overall new work was supported by a solid increase in foreign business, although the rate at which new export orders rose was the least marked in the current four-month growth period," NCB said.

The new export orders index came in at 52.7, well below the 55.6 and 57 recorded in June and May respectively.

Employment growth was strong, driven by the increase in demand and new orders. The employment index was 54, just one-tenth of a point below the record 54.1 that it hit in June.

The rate at which the cost of materials and supplies has been increasing this year eased in July, according to the index.