Industrial production fell by just over 1% in November, bringing to a close the worst three month period for Irish industry since 1980.
Over the three months to the end of November production contracted by 12.9%.
Conall MacCoille, chief economist with Davy, attributed much of the fall to the pharmaceutical industry. Drug production in Ireland has been heavily impacted by a series of big selling drugs coming off patent.
The end of patent protection for drugs including cholesterol treatment Lipitor, for which the active ingredient is manufactured in Ireland by Pfizer, means cheaper generic version of the drug can be produced and distributed by rivals. This hits demand for the brand-name treatment.
The expiry of patents on a host of top selling drugs over a short period of time is referred to within the pharmaceutical industry as the "patent cliff".
Mr MacCoille said the impact of the phenomenon on economic output, or GDP was now becoming apparent.
"It is now clear the impact of the pharmaceutical patent cliff on output has been sustained into the fourth quarter. We now expect industrial output could fall by close to 8% in Q4, pushing down on GDP," he said.
