Manufacturing production was 5.6 per cent lower in March compared with the same month a year earlier, according to new figures from the Central Statistics Office.

The CSO data also shows that the seasonally-adjusted volume of industrial production for the first quarter of the year was 5.2 per cent lower than in the preceding quarter.

Production in the so-called ‘modern’ sector, which comprises a number of high-technology and chemical sectors, showed a monthly decrease of 4.9 per cent in March while a rise of 2.6 per cent was recorded for the traditional sector.

Meanwhile euro region services and manufacturing output contracted more than initially estimated in April, adding to signs of a deepening economic slump.

A euro area composite index based on a survey of purchasing managers in both industries dropped to 46.7 from 49.1 in March, London-based Markit Economics said today. This represents the fastest rate of decline since October and below an estimate of 47.4 published on April 23rd. A reading below 50 indicates contraction.

European Central Bank President Mario Draghi yesterday said the economic outlook for Europe has become “more uncertain” and left open the option of further stimulus after keeping the benchmark interest rate at 1 per cent, already a record low.

“It appears that the euro zone economy is headed for a third successive quarter of gross domestic product contraction,” said Howard Archer, chief European economist at IHS Global Insight in London. “Indeed, there is a growing risk that the rate of euro zone contraction could actually deepen in the second quarter.” The euro remained lower against the dollar after the report, putting it on track for its biggest weekly drop in a month.

Additional reporting - Bloomberg