The manufacturing sector shrank again last month although at a slightly slower pace than in November as poor demand and a strong euro took their toll, data today showed.
The NCB Purchasing Managers' Index (PMI), which measures manufacturing activity, recorded 37.9 in December from 37.1 in November.
November's performance was the worst since the survey began in May 1998.
"December data pointed to another considerable deterioration of operating conditions in the Irish manufacturing sector," said Markit, which compiles the survey.
"A lack of demand was the principal factor behind the latest reduction."
December was the 13th consecutive month the headline PMI reading has been below the 50.0 mark separating growth from contraction after more than four years of sustained expansion.
"The unprecedented rise in the euro against sterling is heaping further pain on manufacturers in the traditional sectors, with some simply finding it uneconomic to continue servicing the UK market," said Brian Devine, economist at NCB stockbrokers.
At 36.3, the employment component of the index fell to an all-time low as companies adapted to tougher conditions. It was sharply lower than 40.1 in November. Output and new orders both continued to contract last month.
"New business fell sharply as uncertainty among clients led them to postpone new projects. Some panellists reported particularly weak demand from Europe," said Markit.