Dell Computers, which employs 4,500 people in manufacturing in Limerick, has more than doubled its European revenue growth rate to 17 per cent in the first quarter, compared to the sluggish 8 per cent rate recorded in the last quarter of 1999, but is still well behind the US 35 per cent growth rate.

The three Limerick manufacturing plants supply the European, Middle East and African (EMEA) region, with sales and support provided by 1,100 people in Bray, Co Wicklow.

Mr Pat Casey, human resources director, said it had been a positive quarter with encouraging results.

The company, the State's largest IT employer, had "rebounded from Y2K concerns. "Europe is a difficult marketplace overall for the computer industry. All manufacturers are facing the same dynamic," Mr Casey said. Analysts said European businesses and governments were slower than the US in putting Y2K-related fears behind them. Recruitment agencies have noted that the pace of recruitment in the Limerick region slowed down in recent months. But Mr Casey said the company was still taking people on and about 200 people had been recruited this year.

This compares to a total of 1,200 employed last year. "We are hiring at the moment. We are hiring at a more conservative rate than the second half of last year, which is very common for our industry."

He added that there was a productivity gain achieved due to the opening of the custom-built European Manufacturing Facility 3 (EMF3), located at the Raheen Industrial Estate.

Manufacturing lines have been moved from the adjacent EMF1 building to EMF3.

"EMF1 will become our administration headquarters," Mr Casey said.

Although fears have been expressed by US analysts that the Dell direct sale model is not suited culturally to Europe, particularly in the key German market, Mr Casey said the home and small business division of the company, which was "at the heart of the direct Dell model", had achieved a 50 per cent growth rate in Europe.

Dell announced after-tax profits on Thursday for the February-April quarter of $625 million (€693 million), up 21 per cent on the same period in 1999.

Shares in the company opened more than 10 per cent higher in New York yesterday on foot of the results.

Europe accounts for about 25 per cent of Dell's sales and it has a 17 per cent market share in what is the world's second largest PC market. But although Dell overtook Compaq in the US last year as the top PC seller, it lags behind its rival generally.