Manufacturing output slowed marginally last month but the rate of contraction was not as steep as feared, new figures show.

The NCB purchasing managers' index fell to a 15-month low of 47.4 from 48.4 in March, the sixth consecutive month it has languished below the 50-point watershed that divides positive and negative growth.

New business won by Irish manufacturers declined, although the pace of decrease moderated slightly for the second consecutive month. The new orders index was 48.3, compared to 48.2 in February.

More ominously, manufacturing exports remained under 50 points for the eighth successive month.

However, activity increased over February, with the export orders index up to 46.9 from 45.6.

Weak demand prompted manufacturers to drastically cut production in what was the sharpest rate of decline since November 2001. Outputs were 46.1 from 48.3.

Cooling in the sector had an inevitable impact on employment with numbers working in manufacturing sliding for the seventh month in a row. The seasonally adjusted employment index was 46.1, down from 47 for February. Redundancies were limited but departing staff were generally not replaced.

Overheads rose moderately, due in part to raw material shortages and climbing oil prices.

Analysts warned that, with no end to the Iraq conflict in sight, recovery is unlikely soon.

"Continuing international uncertainty, heightened by the Iraq crisis, remains a depressing influence on Irish manufacturing activity," according to Mr Dermot O'Brien, NCB chief economist.

"Although the rate of contract in activity is still modest, the decline in manufacturing output and employment deepened in March."