Manufacturing activity declined for the tenth month in succession in July, according to the latest NCB Purchasing Managers' Index (PMI).
However, the rate of contraction slowed marginally compared with the previous month.
The overall index, which is designed to measure business conditions for manufacturing companies, eased from its reading of 45.7 in June to 45.8 last month. A reading below 50 is indicative of contraction.
"The decline in the manufacturing sector appears to have stabilised this month," said Mr Eunan King, senior economist at NCB.
The report also shows manufacturers continued to reduce their workforces in the face of domestic and international demand
Employment in the sector fell for the 11th consecutive month in July, reflecting the hundreds of job losses in the sector last month. The CSO reported recently that industrial employment has fallen to pre-boom levels.
The report noted that manufacturers have reduced prices for the fourth month in a row in July.