The rate of growth in the Irish manufacturing sector improved in February as companies reported strengthening demand and the winning of new clients.

The latest NCB manufacturing Purchasing Managers Index rose to 51.5 last month, up from a reading of 50.3 in January.

Any figure over 50 signals growth in a sector, while a figure under 50 signals contraction.

NCB said that new orders saw a return to growth last month after a marginal reduction in January, its first negative reading in 12 months.

But the stockbrokers noted that the rate of expansion was only slight, while new export orders were little changed after rising slightly in January.

Manufacturers increased their workforces last month as employment returned to growth after a fall in January.

Companies cited expectations for higher production requirements in the coming months for the increase in staffing levels.

However, companies also reported another rise in input costs due to supply shortages. As input costs rose, companies also raised their output costs in February.

NCB noted that this was the fourth time in the past six months that companies have been able to offset input cost pressures with higher output prices.

''With the headline PMI reading pointing to a 12th successive month of growth for the Irish manufacturing sector, and the rate of expansion improving from the nine month low in January, this is a solid outturn,'' commented NCB's chief economist Philip O'Sullivan.

Improvement seen in Ireland's manufacturing sector as demands for exports continue© 2011 Bloomberg Finance LP