AN INCREASE in output by pharmaceutical companies contributed to a 4.3 per cent increase in industrial production over the 12 months to the end of September.

According to data from the Central Statistics Office, the main factor was a 42 per cent increase in the volume of basic chemicals production, a category that includes pharmaceutical firms.

Annual production in modern industries including technology, chemicals and electrical goods over the 12 months to September was up 9.1 per cent.

The traditional sector, comprising of textiles production, foodstuffs and beverages, contracted by 7.3 per cent over the same period.

Over the period the value of industrial production turnover was 0.8 per cent down compared with September 2008.

Alan McQuaid, chief economist with Bloxham Stockbrokers, said during the first three-quarters of 2008 total industrial output and manufacturing production were up 2.6 per cent on average in the year. "However, the average annual rises in the first nine months were well below the average annual increases of 7 to 7.5 per cent posted for 2007 as a whole."

Despite this, Mr McQuaid said the overall growth in output was encouraging.

Within the traditional sector, Mr McQuaid said over three-fifths of output in the food and beverages sector was exported, and it was likely the recent contraction in output was related to slowing demand due to "a slowing of economic growth".