Irish manufacturing output showed a sharp rise in March, increasing at its fastest pace since June 2006 and snapping a trend of three successive monthly declines.
The NCB PMI for manufacturing conditions in Ireland rose from 48.6 to 53.0, the first time it has risen above the 50 mark, which indicates expansion instead of contraction, in more than two years.
New export orders increased at the strongest rate since the survey began in 1998. However, demand not only strengthened in foreign markets, but also showed a rise in domestic markets too. In general, new orders rose at the fastest rate in 30 months.
NCB said it expects that the economy bottomed out in December and January, and predicted expansion in gross national product (GNP) before the second half of 2010. GNP is expected to rise by 2.8 per cent next year.
However, employment continued to fall, marking a 28th month of successive declines. Net job creation is not expected to return until 2011 and will affect consumption, the report said.
NCB also said construction investment would be "severely curtailed" due to oversupply in the market, while government spending would also be pulled back.
"In short, in 2010 expect extremely weak domestic demand to counterbalance a large contribution from net exports on the back of global reflation," NCB said.
