Irish manufacturing companies saw another decline in activity in December, a new report showed on Tuesday.

The NCB Purchasing Managers' Index posted a reading of 48.6 in December, up slightly from 48.5 in the previous month. Any figure below 50 is a sign of contraction.

The index is an indicator designed to provide a single figure measure of the health of the manufacturing industry.

The figures signal a second successive worsening of business conditions in the Irish manufacturing sector.

According to NCB, fragile economic conditions and uncertainty in the eurozone led to a reduction in total new orders during December. Moreover, the rate of contraction was solid, and sharper than that in November.

However, new export orders rose slightly in December with an increase in new orders from Britain.

Irish manufacturers cut production for the second month running amid weak demand.

Manufacturers raised employment levels marginally, as some companies took on extra staff to work on new projects.

NCB said intense competition led to a cut in output prices for the fifth month in a row in December.

Companies said higher input costs were due to increased raw material costs and a weakening of the euro against sterling.

NCB chief economist Brian Devine said despite the slowdown in global growth, Irish exports will remain positive in 2012.

"We once again expect a large positive contribution from net exports in 2012 and for this contribution to outweigh the continued weakness in the domestic part of the economy," said Devine.

Devine said positive GDP was expected in 2012 but employment was forecasted to decline once again for the fifth year in a row.