The performance was driven by a growth in new orders, with December's level of production the strongest in the current 17 month sequence of growth, and third-fastest in the Investec Manufacturing PMI Ireland surveys history. The result was the highest since August. "Higher new orders encouraged firms to increase employment sharply", said Gabriella Dickens, an economist at IHS Markit.
However, despite the additional resources, manufacturers' backlogs of work increased for an eighth successive month in December.
A private survey that focuses on small and medium-sized firms in showed that manufacturing activity picked up at a slower pace in November.
This is also the highest PMI in the last three months of October, November and December.
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The data support the view that the economy is beginning to gradually lose steam after growing by a forecast-beating 6.9 percent in the first nine months of the year, but the findings did not appear to suggest a risk of sharper slowdown at this point.
China's manufacturing sector is expected to continue expanding in 2018 despite the slight decline of an index, said investment bank China International Capital Corporation (CICC).
Boosted by hefty government infrastructure spending, a resilient property market and unexpected strength in exports, China's manufacturing and industrial firms have been a major driver behind solid economic growth this year, with their strong appetite for raw materials boosting global commodity prices.
The official nonmanufacturing PMI, which covers the nation's services and construction sectors, rose to 55 in December from 54.8 in the previous month.
The rate of input cost inflation ticked down from November.