Manufacturing activity stalled in September, a survey showed today, after increased Covid-19 restrictions brought three months of post-lockdown growth to an end as output, new orders and employment all declined.
The AIB IHS Markit manufacturing Purchasing Managers' Index (PMI) slipped for the second month in a row to 50.
This is right on the dividing line between expansion from contraction and down from 52.3 in August.
In April, a lockdown of the economy to slow the spread of Covid-19 had pushed the index to a 10-year low of 36 before it rebounded sharply to a near two-year high of 57.3 in July.
"The rebound in activity seen over the summer has come to a halt," AIB's chief economist Oliver Mangan said.
"The details of the September survey show clear signs of a loss of momentum in manufacturing. The main factor behind this is weakening demand as a result of the second wave of Covid-19 and associated increased restrictions on activity," he added.
Ireland reopened its economy slower than much of Europe but has tightened restrictions in some regions while maintaining strict curbs on international travel.
Brexit trade talks between the European Union and the UK, shortages of supplies and transportation difficulties were also cited as sources of uncertainty, AIB said.
Some of those surveyed said lower export sales to Britain and the US contributed to the decline in new orders. They also reported a disruption to supply chains and lengthening of delivery times as a result of the pandemic.
The country's multinational sector, led by some of the world's largest technology and pharmaceutical firms, has helped shield the economy from the worst of the crisis, but unemployment is still forecast to average almost 16% this year.