New figures show a marked decline in industrial output from Ireland's high technology and chemical sectors, with the traditional sector also suffering.
Industrial production across all sectors fell by 6.4 per cent in April with the high-technology and chemical sectors showing a particularly sharp slump.
Economists said the figures were very disappointing and warned that the industrial sector could report its first annual fall in output for more than 20 years.
Alan McQuaid, an economist at Bloxhams, described the latest figures as less than encouraging with anecdotal evidence suggesting things were unlikely to improve in the short term.
"The fall in the euro, if sustained, may help to increase new orders in the second half of the year, particularly outside the euro zone, but the overall industrial production this year is none too promising, as Irish manufacturers, like most other countries in the western world, face increased competition from Eastern Europe and, more particularly, the likes of China and India," he said.
At this stage, Mr McQuaid, says the best we can hope for this year is for average manufacturing and industrial output to be unchanged on 2004.
More likely it will record its first overall annual decrease since 1982. Seasonally adjusted figures issued by the Central Statistics Office yesterday showed that production was down 5.8 per cent in the three months from February to April 2005.
The so-called modern sectors, such as high-tech and chemicals, showed a decrease in production for April of 8 per cent. The seasonally adjusted industrial turnover for manufacturing industries was one percentage point lower in the three months to the end of April.
On an annual basis, turnover was 0.3 of a percentage point higher. The latest figures show that industry is the weakest performing sector of the Irish economy.
Davy Stockbrokers said this was also reflected in the official employment figures, which showed industrial employment down 2.5 per cent over the last two years.
Output has been weak in this sector for almost a year, after a short-lived rebound in late 2003 and early last year. In the first four months of this year, industrial production in the mainly Irish-owned part of industry decreased by 4 per cent.
The figures show that the output from multinational companies is also falling.
The latest purchasing managers manufacturing survey showed the index reading in May at its lowest level in the current period and just marginally above the neutral 50 mark. A figure below this signals contraction in the sector.
