Output from Irish-based factories fell by a 18.2 per cent in June on the back of a sharp contraction in the pharma sector, official figures show.

The latest Central Statistic Office (CSO) numbers underscore the volatility of Ireland's post-crash manufacturing sector.

The 18 per cent drop in June follows a 3.3 per cent contraction in May and represents an unwinding of the sharp rises in output recorded in the preceding months.

The figures show output was still up 12.8 per cent on a quarterly basis and up over 24 per cent year on year.

A breakdown of the figures showed the “modern sector”, which includes pharmaceuticals, fell by a massive 27.4 per cent in June, and is now 2.4 per cent down on a annual basis.

The traditional sector, which accounts for two-thirds of overall employment in Irish industry, shows output was up 5.5 per cent in the second quarter and 13.8 per cent annually.

"As ever, volatility in the pharmaceutical sector has driven swings in the industry data," Davy Stokebrokers said in a research note.

Despite the contraction, it noted that output in this sector was 20.5 per cent on the quarter and 28.2 per cent on the same period last year.

This suggested the worst of the patent cliff may now have passed, it said.

Last month’s data were also the first to incorporate methodological changes and reweighting of sectors, adding further volatility.

More encouraging is the news that output in the traditional sector, which accounts for two-thirds of overall employment in Irish industry, has gro, Davy said.

“So industry now looks set to make a strong positive contribution to Irish GDP growth in the second quarter.”