Manufacturing output plunged by 13.9pc in September as pharmaceutical production collapsed, reinforcing fears an incipient recovery in the economy will struggle to gather pace.
The Central Statistics Office (CSO) said output in other industries declined by 12.7pc on the month. On an annual basis, manufacturing was down 13.7pc and other industries were down 12.7pc on September 2011, the CSO said. That was mainly due to a 32pc fall in chemicals and pharmaceutical.
Output in the traditional sector, which employs most people in Ireland, declined by a more modest 1.3pc in September. The sector was down 5pc in the year as the UK economy continues to sag.
While industrial production figures can be volatile, industrial production has been falling steadily since last year as pharma companies struggle to come up with new drugs and the patents on old drugs run out.
The latest figure may represent "the first signs of patent expirations in the pharmaceutical sector," Davy Stockbrokers told investors.
Alan Quaid, at Merrion Stockbrokers, said the latest figures were "very" disappointing. "The worry is that overall production will continue to weaken sharply," he added.
Some reports say Irish pharmaceutical sales could fall by as much as 52pc as patents expire in 2013. This could have a knock-on effect on pharmaceutical exports, which account for over half of all merchandise exports.
UK industrial output fell more sharply than expected in September, new figures showed yesterday. Excluding a decline in June, due partly to an extra public holiday, the 1.7pc monthly fall was the biggest since August 2009 and bigger than the 0.6pc decline forecasted.
German factory orders also slumped. Output fell the most in a year in September as Europe's sovereign debt crisis and slowing economic growth prompted companies to reduce investment.
Orders, adjusted for seasonal swings and inflation, slumped 3.3pc from August when they dropped a revised 0.8pc, the Economy Ministry in Berlin said. That's the second straight drop and the biggest since September 2011.