Manufacturing production rose in December but the increase wasn't enough to make up for previous poor monthly data that dragged down the quarterly figures.
New data from the Central Statistics Office showed production for the manufacturing industries climbed by 3.5 per cent compared with the previous month, but was 4.1 per cent lower than a year earlier.
Over the month, the modern sector, which includes high tech and chemical sectors, rose by 3.1 per cent, while the traditional sector increased by 2.6 per cent.
Over the three months between October and December 2011, the seasonally adjusted volume of industrial production fell by 1.4 per cent compared with the preceding quarter.
The turnover index was rose by 1.2 per cent compared with November 201, and 9.7 per cent higher than December 2010.
Over the year, total industrial production was up 1.0 per cent, while manufacturing output was 1.6 per cent higher than in 2010.
"The broad picture is of a slowdown in industry and manufacturing since the beginning of the year, but we remain wary of drawing firm conclusions," Davy chief economist Conall Mac Coille said in a note.
Bloxham chief economist Alan McQuaid said growth in the sector depended on the world economy and global demand.
"With domestic demand so weak it is in our view vital for the economy that the manufacturing sector remains healthy and competitive.," he said. "Whatever about the near-term, we continue to believe that when the world economy regains momentum, Ireland is better placed than most to take advantage of that, and we still think a strong manufacturing production/export performance will provide the platform for a sustainable Irish economic recovery over the next few years.
Meanwhile, limp industrial output in December supported signs the worst may be over for France's economy, keeping intact hopes that the country may avert a recession ahead of a presidential election in which jobs and growth will take centre stage.
Today's worse than expected 1.4 per cent dip in production supported expectations that gross domestic product may have shrunk in the last quarter of 2011, while recent business sentiment surveys have pointed to a gradual recovery.
Additional reporting: Reuters
