IRELAND'S MANUFACTURING sector dropped to a new record low in November as output and new orders contracted at the fastest rate in the last decade.

The NCB Purchasing Managers' Index (PMI), which measures manufacturing activity, dropped to 37.1 last month, lower than the previous record low of 39.7 in October. Any reading below 50 marks contraction.

November's performance was the worst since the survey began in May 1998 and suggests an acceleration in the contraction in the sector. Production has declined in each of the last nine months after four years of sustained expansion.

Brian Devine, chief economist at NCB stockbrokers, said the figures masked strong growth from hi-tech firms but added their performance was unsustainable, with falling demand from the UK and US expected next year. "The traditional sector has suffered badly and there is no doubt that the majority of firms in Ireland's manufacturing base are experiencing difficulty," Mr Devine said.

November was the 12th consecutive month that manufacturing employment has declined, with the report noting the rate of job losses was similar to a record high seen in October. Almost 30 per cent of firms surveyed reported a reduction in staff numbers last month, according to Markit, which compiles the PMI data.

New orders also hit record lows last month due to a fall-off in demand as the wider economy slows down. More than 37 per cent of manufacturing firms said production was lower in November.

The fall in export orders to the UK, continental Europe and Asia was the second steepest over the last 10 years.