The rate of growth in manufacturing slowed in January with output, demand, prices and employment all rising at slower rates than at any time in the last four months, the latest data show.

The NCB Purchasing Manager's Index, published yesterday, fell from 58.7 in December 1999 to 56.7 in January, reflecting what NCB describes as a negative "Millennium effect".

A figure above 50 in the index represents growth in the economy while a figure under 50 represents contraction.

The index shows output rose strongly but fell below that recorded in the previous four surveys. The seasonally adjusted output index fell from a survey high of 62.3 in December to 59.9 in January.

Export orders showed their tenth consecutive monthly improvement but overall order books showed their weakest increase in six months, the survey found.

Purchasing by manufacturers also slowed with the quantity of inputs bought rising at the slowest rate since last August. The survey found delivery times lengthened for the tenth consecutive month.

The employment index dropped to 55 from 57.4 in January, the slowest rate of growth since last August, with firms reporting a slower than usual start to recruitment in the new year.

This easing largely reflects a "Millennium effect" or a "minor blip" in the Republic's economic growth rather than a trend, according to Mr Eunan King, senior economist at NCB. "In the run-up to the Millennium, there was considerable stock building to safeguard against potential Y2K-related problems. Now the Millennium has passed, this has slowed."

The NCB index surveys 300 industrial companies in the manufacturing sector. The company plans to expand the survey to include other sectors after analysing the index results at the end of the year.