Recovery took hold in the Republic's manufacturing sector last month, according to the latest NCB Purchasing Managers' Index (PMI).

The index shows that business conditions improved sharply in March, as new orders came in faster than at any point since the middle of 2002.

The seasonally adjusted measure of conditions within manufacturing companies had a reading of 54.4 in March, up from 53.7 in February.

Any reading above 50 indicates expansion, with the index sitting above this level for the past seven months.

Mr Dermot O'Brien, chief economist at NCB, said the March result showed that recovery was gathering pace in the sector.

"The return to growth in employment is also becoming more established," said Mr O'Brien.

Last months's performance was underpinned by new business orders, as manufacturers drew benefit from growing confidence in the global economy.

NCB said the export component of new orders showed a solid rise in sales to international clients for the fifth month in a row. Firms responding to the PMI survey reported a notable increase in sales to Asian and North American clients in particular.

This uptick in demand spawned in turn a marginal increase in manufacturing employment levels for the second month in a row.

Companies that hired more staff in March said they had done so to boost capacity within their units.

Another less positive consequence of the growing recovery was a shortage of certain raw materials which led to a substantial lengthening in delivery times in March.

NCB said this had allowed suppliers to charge a premium for those goods - notably metals - that were in strong demand.

Prices charged by manufacturers for their products failed to keep pace with this trend however, rising only marginally.

The Reuters euro zone PMI showed meanwhile that manufacturers across the currency region as a whole put in its best performance in more than three years in March.