Industrial production fell 8.3 per cent in April after practically stalling in March, according to initial estimates released by the Central Statistics Office (CSO) yesterday.

The figures suggest that vulnerable Irish manufacturers have been forced to review operations against a challenging economic backdrop.

The sector as a whole has been troubled by a succession of factors over recent months, including high domestic inflation and insurance costs, and unfavourable currency fluctuations.

Figures published last week showed that manufacturing firms accounted for more than 40 per cent of the 10,169 redundancies notified to the Department of Enterprise, Trade and Employment in the first five months of this year.

In May alone, almost 900 manufacturing redundancies were recorded.

The latest CSO release suggests, however, that industrial production levels continued to grow when the three months ending in April are taken together.

Production was up 7.8 per cent over the period when compared to the previous three months, according to the office's early estimates. The figures also point to an annual jump in production levels in April, with activity expanding by 3.7 per cent when compared to the same month of 2002.

Much of the annual increase, however, is likely to be attributable to a substantial drop in production in April last year.

An element of the three-month increase was, meanwhile, linked to a strong expansion in production in February.

In general, the industrial production series is remarkably volatile, leaving economists reluctant to draw conclusions from monthly variations.

Commentators have in the past highlighted the transfer pricing policies of multinationals based in the Republic as a factor that could "pollute" the overall indicator.