The manufacturing sector slumped to a new record low in November with output and new orders shrinking at the fastest pace in a decade.
The NCB Purchasing Managers' Index (PMI) dropped to 37.1 in November, worse than the previous record low of 39.7 in October. The performance was the worst since the survey began in May 1998. Over 37% of survey respondents noted a fall in output last month.
October was the 12th month in a row where the headline PMI reading has been below 50 mark, which separates growth from contraction. This follows over four years of sustained expansion.
The survey shows that output and new orders slid while also employment suffered a steep drop.
For the second month in a row, new orders fell at a record rate. Reduced demand from the UK, Europe and Asia led to a further considerable contraction in new business from abroad.
Employment levels also fell substantially, with 30% of respondents saying they will cut jobs as they adapt to lower output requirements.
On a brighter note, input costs saw a substantial decline as a result in the fall in oil prices. The reduction was the first since July 2003, while the rate of inflation was the slowest since April 2004.
NCB economist Brian Devine said the industrial output figures are not as weak as indicated by the PMI data.
'However, this has largely been driven by a number of firms in the modern (hi-tech) sector continuing to experience robust growth. The traditional sector has suffered badly and there is no doubt that the majority of firms in Ireland's manufacturing base are experiencing difficulty,' he said.
He added that the weak sterling has had an especially bad effect on the traditional sector.
He warned that the modern sector is unlikely to be immune either and predicts that imports in the US and UK are expected to shrink in 2009 with imports in the euro zone to grow only marginally.
