Unemployment fell marginally in December, according to the Central Statistics Office (CSO).

The jobless rate slipped to 4.7 per cent from 4.9 per cent in July, a CSO analysis of the latest live register figures reveals.

The findings defy analyst predictions that unemployment would top 5 per cent by the close of 2003.

The number claiming social welfare benefits actually climbed 6,063 to 170,604 in December, a rise of 3.7 per cent. But the seasonally adjusted live register fell 700 to 169,700, the fifth consecutive monthly decline.

The south west bore the brunt of the increase (up 5.2 per cent), while Dublin fared best with unemployment up 1.23 per cent).

The slip in the jobless rate suggested a "shallow downturn" in unemployment, said Mr Robbie Kelleher, head of research at Davy Stockbrokers

Opposition politicians said the data highlighted the plight of the Republic's manufacturing sector, beset by closures in late 2003.

"Whilst the seasonally adjusted live register over the past 12 months shows a slight fall, there is worrying evidence of a serious jobs situation that is likely to deteriorate even further as a number of major plant closures have yet to take effect," said Labour finance spokeswoman Ms Joan Burton.

With Dairygold Co-Op planning heavy lay-offs and senior figures at Intel voicing disquiet over the Republic's waning competitiveness, the outlook for manufacturing in 2004 was bleak, she said.

The jobless level climbed to a four-year high in 2003, noted Mr Phil Hogan, Fine Gael's enterprise spokesman.

This, Mr Hogan claimed, was proof that Government "stealth taxes" were harming the economy.