Ireland's manufacturing sector deteriorated at a faster rate in January after unusually severe weather negatively impacted on output, new orders and supplier performance.
The NCB Purchasing Managers' Index (PMI), which measures Irish manufacturing activity, fell to 48.1 after it had crept towards the 50 mark separating growth from contraction but stalled at 48.8 in both November and December.
The sub-index measuring manufacturing output, which in December ended a one-month return to growth, was hit hardest, falling back to levels last seen in August by slipping to 47.0 from 49.8 in the previous month.
"The adverse weather conditions which prevailed in early January caused havoc with businesses on both the supply and demand front," Brian Devine, economist at NCB Stockbrokers, said.
"Consequently it is difficult to decipher whether the fall in demand was solely due to the weather or simply that demand continues to remain weak."
Despite most sub-indexes suffering in January, new export orders accelerated to their highest level since October 2007, offering a glimmer of hope for Ireland's still ailing domestic economy.
While Ireland technically pulled out of recession in the third quarter of 2009 based on quarterly gross domestic product (GDP) data published in December, the economy has remained very weak with the more relevant measure of gross national product (GNP) continuing to fall.
"This (export increase) combined with a moderation in the pace of decline in domestic demand should see GNP as well as GDP begin to expand in Q1 2010," Mr Devine said.
Reuters