Irish manufacturing activity contracted last month as both output and new orders fell.

The latest NCB purchasing managers' index fell to 48.5 from 50.1 in October - a reading below 50 equates to a contraction in activity.

One of the 11 sub-indices assessed in the survey indicated a marginal reduction in new orders at Irish manufacturing firms. New business in the sector has now decreased in five of the past six months.

Anecdotal evidence suggested that weakening demand was a key factor behind the fall in new orders, with clients reluctant to commit to new projects.

There was also a marginal reduction in new export orders reflecting the wider weaknesses in the euro area.

The sub-index of input prices, which was driven up by higher oil and raw material prices earlier this year, rose at its slowest rate for 22 months as weak demand for inputs led to reduced pricing power at suppliers.

NCB said: “Operating conditions in the Irish manufacturing sector deteriorated modestly during November as both output and new orders fell following increases in October.”