Industrial employment has shrunk to levels recorded before the economic boom, according to the latest employment release from the Central Statistics Office (CSO).

The seasonally-adjusted figures show industrial employment dropped by 14,200 to 248,500 in the year to March. This compares to levels of more than 270,000 recorded in early 2001.

In the first quarter of this year alone, industrial employment numbers fell by 3,100. In the manufacturing sector, worker numbers declined by 2,300, according to the release.

A breakdown of the figures shows that employment levels are declining in almost all industrial sectors.

The decrease is particularly stark within companies manufacturing office machinery and computers, which cut employment levels by almost 7,000 in the year to March.

Economists at Davy Stockbrokers said this fall was "a cause of concern", predicting that the overall industrial employment picture would remain bleak over coming months.

Employers' group, IBEC, said the job shrinkage was linked to the stiff competition faced by Irish companies seeking to sell into "stagnant markets" while the euro continued to appreciate.

Separate data from the CSO have shown meanwhile that industrial earnings were 7.5 per cent higher in March than in the same month of 2002.

IBEC senior economist Mr Aebhric McGibney said that as long as Irish wage growth outpaced that of competitor countries, more jobs would be lost.

Fine Gael's spokesman on Enterprise, Trade and Employment, Mr Phil Hogan, expressed surprise at the IBEC response, however, pointing out that the body had agreed to prevailing wage increases in the last social partnership deal.

Mr Hogan blamed the industrial job losses on increased Government charges.