After the manufacturing sector of the country ended 2009 on a rather "patchy" note, the Australian Industry Group has sounded warnings that even more manufacturing jobs could he headed overseas.

For the first time in 5 long months, the Ai Group's Performance of manufacturing Index slipped in December by 2.7 to 48.5 points. The figures have confirmed that the manufacturing sector contracted for the month.

According to Ai Group Chief Executive Heather Ridout, the industry might just continue to struggle, mainly because of the high dollar value and raising interest rates.

"Inevitably I think we will see continued pressure on employment, we saw encouragingly a couple of months of positive employment readings though I must say December was a very, very marginal positive. However I think with the dollar high I think that's going to contribute over time to quite a lot of restructuring in the sector and more off-shoring in activity", she was quoted as saying.

For the month of December, major declines were reported by productions in paper, printing, and publishing and food companies.