Growth in Irish manufacturing remained subdued in June with a slight upturn hampered by fallout from the foot-and-mouth crisis and global economic sluggishness.

The NCB stockbrokers' Purchasing Managers' Index (PMI), which is designed to provide an overall view of manufacturing conditions, registered 50.9 in June versus 50.2 in May.

Some 285 manufacturing companies in the Republic are surveyed monthly and readings above 50.0 indicate growth and below 50.0 signal contraction.

Despite the marginal rise from May's low, the pace of expansion was negligible.

"We had very little change really," NCB economist Mr Eunan King said. "The index is just keeping its head above 50. We are into growth territory but nothing more."

New orders, which dipped to 49.3 in May, popped back up to 51.5 in June. However, the rate of growth of new orders remained subdued as manufacturers continued to report the adverse effects of global economic slowdown.

The overall volume of export orders received by Irish manufacturers fell for the second consecutive month despite the competitive advantage provided by the weak euro, particularly against the dollar.

Irish manufacturing exports in June slowed to 48.6 versus 49.3 in May and down from 52.2 in January. Some of this downturn is likely to have resulted from the foot-and-mouth scare.

He said NCB still expected an economic growth rate of 7.5 per cent for 2001 essentially because exports for the first part of the year were so strong.

Employment dipped further in June to 50.3 compared to 51.9 in May. Mr King said employment had been growing at an unsustainable pace for the last few years, running at 4-5 per cent a year, and was now getting closer to sustainable levels which he estimated at around 2.5 per cent.

A similar survey of Europe showed a gloomier picture. The euro zone PMI was 47.9 compared to 48.5 the previous month.