Northern Ireland lost almost 11,000 private sector jobs in the past year.
The findings are contained in a new report by PricewaterhouseCoopers which predicts that the North's economy will shrink further this year.
PwC said the economy had been steadily contracting since the middle of 2011 and predicted it would shrink by a further 0.4 percent this year.
The PwC report also found that the greatest impact on job losses was felt by the construction and retail sectors, which lost 5,710 and 5,820 jobs respectively.
Over the same 12-month period, around 500 jobs went in financial services, 230 in food processing and 100 in tourism and leisure. The only sector to grow was manufacturing where job numbers increased by 1,390 over the two years to March 2012.
PwC blames the job losses on the eurozone crisis and public spending constraints, and believes that if the eurozone crisis is dealt with, recovery will begin next year.
Dr. Esmond Birnie, PwC chief economist in Northern Ireland, said if the eurozone crisis was resolved the North could see some modest recovery and growth in 2013.
"Over the past two years, Northern Ireland has continued to attract outside investment and reinvestment by externally-owned firms already operating here," he said.
"A number of our larger manufacturing exporters have also been successful in export markets and we have even seen some modest growth in
"The problem is that too few local companies are internationally competitive and our historic reliance on steady public spending growth means that Westminster's austerity program is hampering the Northern Ireland Executive's ability to commission major infrastructure programs.
"If the eurozone crisis is dealt with, we can expect recovery to begin next year. But if the crisis deepens, we are facing very serious problems indeed."