A fall in overseas orders sent manufacturing into a decline for the first time in more than a year last month, the latest figures show.

The NCB Republic of Ireland Manufacturing Purchasing Managers' Index (PMI) shows that activity in the sector fell in March. The overall index for the month read 48.6, below the benchmark score of 50 which indicates no change.

Any figure above 50 indicates growth while any reading below this number indicates a fall in activity.

“The reading signalled the first deterioration in business conditions in the sector since February 2012,” NCB said yesterday.

Philip O’Sullivan, the stockbroking firm’s chief economist, said that a fall in new orders, and particularly new export orders, was to blame for the decline.

“New orders were a key factor behind the decline, with these slipping below the 50 no-change level for the second time in three months,” Mr O’Sullivan said.

“New export orders, which had recorded growth in each of the preceding five months, fell into negative territory during March, with the rate of contraction at the sharpest level seen since August 2009.”

Mr O’Sullivan added that a number of companies that took part in the survey used to compile the index, reported a fall in the number of new orders from the UK.

He suggested that this was due to sterling’s weakness against the euro during March.

The new export orders index was 47.6 while the overall new orders index was 49.1.

The fall in new orders had a knock-on effect on jobs, with the employment index reading 47.2, indicating that manufacturing suffered its sharpest decline in employment since October 2011.

Mr O’Sullivan described the employment figure as disappointing and pointed out that the index shows that jobs were lost in manufacturing in two out of the first three months of 2013.

Pharmaceutical manufacturer, MSD, and Abbott’s medical devices unit in Clonmel both announced plans to cut jobs during the first quarter of the year.

Mr O’Sullivan said that the falls in new orders, jobs and overall output indicated by the index in the Republic’s manufacturing industries were disappointing. “We will closely watch April's release to see if any of these trends have persisted into the second quarter, paying particular attention to see if the elevated macroeconomic uncertainty of recent days and weeks weigh on survey findings,” he said.