The Iraq war is hampering the manufacturing sector and caused it to contract for the sixth consecutive month in March.
The headline Purchasing Managers' Index (PMI), which was published today, remained below the critical 50.0 no change mark for the sixth successive month.
Nevertheless, despite falling from 48.4 in February, to 47.4 in March (its lowest level since November 2001), the rate of contraction of the manufacturing sector indicated by the PMI was only modest.
Commenting on the survey, Mr Dermot O'Brien, chief economist at NCB, said: "Continuing international uncertainty, heightened by the Iraq crisis, remains a depressing influence on Irish manufacturing activity. Though the rate of contraction in activity is still modest, the decline in manufacturing output and employment deepened in March".
Volumes of new business placed with Irish manufacturers declined slightly for the sixth consecutive month in March. Shrinking order books were widely linked by firms to general business uncertainty, which had been compounded by the Iraq crisis.
But the rate of decline of new orders was found to have moderated marginally for the second month running.
The export component of order books showed waning international orders for the eighth successive month in March, although the rate of decline of exports was less marked than the previous month's 16-month record rate.