Ireland's economy is almost certain to have been the strongest performer in Europe for the fourth straight year, while unemployment has been on a steady downtrend since 2011.

The purchasing managers' index for manufacturing rose to 59.1 in December, the highest level since the series began in 1998, from 58.1 in November.

Manufacturing activity has remained above the 50 mark separating growth from contraction since June 2013 when Ireland was approaching the end of a three-year international bailout programme.

December's expansion was driven by a further uptick in new orders, which grew at the third-fastest rate in the survey's history and boosted jobs growth to record levels as the economy moves towards full employment.

However, there was a note of caution in the data as growth in new export orders fell to 56.9 in December from a near three-year high of 60.0 a month earlier.

Ireland is widely seen as the European Union country most exposed to Britain's decision to leave the bloc, although the impact has been broadly muted to date. The survey's authors said a number of respondents signalled that they were receiving higher new orders from customers in North America.

"Given the strong conditions evident in the manufacturing sector, it is no surprise to see that firms are upbeat about the outlook, with more than six times as many companies expecting to see growth in 2018 as opposed to those who anticipate a decline," said Investec Ireland chief economist Philip O'Sullivan.

"With global growth expected to improve to a seven-year high in 2018, we think that firms are right to be confident about their prospects for this year."

(Reporting by Padraic Halpin; Editing by Hugh Lawson)

By Padraic Halpin