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Irish manufacturing grows in October at fastest rate in 2.5 years - PMI

DUBLIN (Reuters) - Irish manufacturing activity expanded at the fastest rate in 2-1/2 years in October, showing that the recovering economy is gaining momentum as it prepares to exit its EU/IMF bailout, a survey showed on Friday.

Ireland pulled out of recession in the second quarter and though growth remains anaemic, indicators have pointed to a pick-up in the second half and in 2014 with the completion of the country's 85 billion euro (73 billion pounds) bailout programme due in December.

The Investec Manufacturing Purchasing Managers' Index rose to 54.9 in October from 52.7 in September, moving further above the 50 line dividing growth from contraction and hitting its highest since April 2011.

It was the fifth successive month of expansion following a three-month dip to the end of May.

"Respondents cited the U.S. and Europe as sources of higher demand during the month," Investec Ireland chief economist Philip O'Sullivan said.

"Encouragingly, the employment component recorded growth for a fifth successive month in October, with the rate of expansion improving to its highest level since June 2012."

Ireland last month presented a seventh austerity budget in six years and is trying to encourage more house building and consumer spending to help economic growth accelerate to 2 percent next year.

Unemployment has started to fall but remains above 13 percent.

Manufacturing accounts for about a quarter of Irish gross domestic product, according to World Bank figures.

The new orders subindex, seen as a forward-looking part of the survey, rose to 55.5 from 53.5 in September. In a positive sign on the job front, the employment subindex rose to 55.7 from 52.8.

(Reporting by Sam Cage; Editing by Hugh Lawson)