OUTPUT FROM industry surged in March but the uplift failed to translate into strong growth for the first quarter, the Central Statistics Office indicated yesterday.

The latest figures show that industrial output climbed by 9.1 per cent in March, following declines in each of the two previous months.

This led to annual growth for the quarter of 2 per cent, suggesting that uncertainty in the global economy is filtering into Irish manufacturing.

"Quite clearly, what happens to the world economy and the euro exchange rate will have a huge bearing on how the Irish manufacturing industry performs in 2008," said Alan McQuaid, chief economist at Bloxham.

Despite the mildly positive quarterly growth, industrial and manufacturing output are likely to be lower in 2008 than in 2007, Mr McQuaid believes.

Ibec chief economist David Croughan said March had brought a "very welcome" bounce in production and noted a strong month for the high-tech sector.

Traditional industries had a tougher time, with output falling by 1.7 per cent in the first three months.

Last year, output in the "modern" sector grew by 8.7 per cent, while the traditional sector saw slower growth of 3.7 per cent.

"It is clear that the global slowdown and the strength of the exchange rate are having a negative impact on traditional industry," said Mr Croughan.