INDUSTRIAL output fell 9.1pc in the three months to October compared to the previous three-month period, the Central Statistics Office said yesterday.
Production is now 17.9pc lower that it was a year ago as multinationals see demand for their products drying up overseas. The sector has seen output shrink 20.8pc in the past year.
"It now looks like the Irish manufacturing sector will post an overall decrease in output in 2012 following two years in a row of growth," Merrion Stockbrokers economist Alan McQuaid said.
Production figures swing violently from month to month and most economists look at three-month figures to smooth out some of the swings. On a monthly basis, output was up 3.1pc.
The sector posted a monthly increase of 7pc in October.
The "traditional" or indigenous sector posted a monthly fall of 0.8pc in October and was down 5.5pc in the year.
"Manufacturing growth in the short-term is expected to be primarily driven by industries under the 'modern' umbrella," Mr McQuaid said. Given the unfavourable global economic backdrop, the worry is that overall production will continue to weaken, which doesn't augur well for the prospects of Irish exports, an integral part of recovery hopes."