Manufacturing growth eased to its slowest pace in two years in February, as a stronger euro and weak new orders hit.

Investec’s monthly Purchasing Managers’ Index (PMI), an indicator of the health of the manufacturing industry, gave a reading of 52.9 in February, down from January’s 54, but still indicating that the industry is growing. It is the 33rd consecutive month of growth.

Philip O'Sullivan, chief economist at Investec Ireland, said that the report shows that "global headwinds" may be starting to weigh on the manufacturing sector here.

“When the Investec PMIs for January were released a month ago we cautioned that ‘Ireland will not be immune to any slowdown in international trade’. We suspect, therefore, that some of the index changes noted above are connected to the more troubled global backdrop. With that being said, on balance we expect that the sector will record another year of growth in 2016.”

New orders moderated to its weakest since November 2013, with new export orders easing to the slowest since February 2014.

“We suspect that at least a part of this relates to recent euro strengthening, although we should note that some respondents cited the US and UK as the main source of new export orders,” Mr O’Sullivan said.

On the margin side, input prices fell very sharply in February, with the latest decline the strongest recorded since November 2009. This drop was attributed to commodity price weakness in areas such as oil, food and polymers.

One bright spot was the employment index, where the rate of job creation quickened to a five month high.

“Employers have added to headcounts for 33 successive months now, but we question whether the current rate of job creation is sustainable given some of the trends noted above,” Mr O’Sullivan said.