Ireland's manufacturing sector last month posted its largest improvement since June, signalling companies may be starting to shrug off the effect of the Brexit vote.

But the level of new export orders only grew marginally, as sterling weakness made securing new work in the UK more difficult, according to the latest Purchasing Managers' Index for the sector.

In the UK, the sector retained strong growth thanks to the weaker pound, although this also pushed up costs.

Philip O'Sullivan, economist with specialist bank Investec, sounded a note of caution on the Irish data.

"We previously spoke of 'well-founded caution on the part of Irish manufacturers as we head into year end'," Mr O'Sullivan said.

Mr O'Sullivan pointed out that about 22pc of Irish merchandise exports go to the United States.

The seasonally-adjusted PMI posted 52.1 in October, up from 51.3 in September and signalling the largest improvement in business conditions since June.

The rate of input cost inflation picked up in the month amid reports of higher costs for items such as food and oil as well as a strengthening of the US dollar against the euro.

Source: Irish Independent