Ireland's manufacturing sector contracted slightly on February, but output rose and new orders increased, a new survey showed today.

The NCB Purchasing Managers' Index showed some signs of stability last month, with the headline figure falling to 49.7, just below the 50 mark that separates expansion from contraction. That compares to 48.3 in January.

Output was higher in the month, however, at 50.4, bringing to a end three months of decline.

There were other surprises in the data, as new orders climbed to 50.1, but export orders fell to 49.7, from 50.9 a month earlier and fractionally below the expansion mark.

"When we look at the internals of the new order numbers though we would view the figures as a positive and would not put too much weight on the exports number," NCB chief economist Brian Devine said. Input costs continued to rise, the survey noted.

"In spite of this, manufacturers continued to lower their output prices. Charges have decreased continuously since August 2011, and the rate of decline was sharper than that seen in the previous month," NCB said.

Employment in the sector continued to fall, with the index measuring 49.3 for the month, down from 49.53 in January. Employments levels have fallen for five out of the past six months, NCB noted, with new orders insufficient to create jobs in the sector.