UK manufacturers are expecting significant falls in activity over the next three months, according to the latest Quarterly Industrial Trends Survey from the CBI.
Manufacturing orders and output are expected to fall over the next quarter, following modest rises in domestic demand and production over the past three months. Firms are also predicting a run-down of their stock holdings, said the organisation.

The survey showed firms are less optimistic than three months ago, as sentiment about the general business situation and export prospects fell for the second consecutive quarter.

Of the 446 manufacturers responding, 30% said domestic orders rose in the three months to October, and 25% said they fell. The resulting balance of +5% indicates a very modest rise. Export orders over the same period were flat, showing the lowest balance (+1%) since October 2009.

In the next three months, firms expect both domestic and export orders to fall significantly (a balance of -13% and -14% respectively). One factor behind the disappointing export performance is the availability of export credit finance, revealed the survey, with the proportion of respondents citing this problem rising sharply.

CBI chief economic adviser Ian McCafferty said: "Manufacturers saw modest growth in orders and production over the past quarter. However, sentiment has deteriorated sharply, and firms expect sizeable falls in activity over the next three months. The quarterly fall in sentiment is the largest since the height of the recession in mid-2009.

"Confidence among manufacturers is no doubt also being sapped by uncertainty over developments in the Eurozone, leading to broader concerns over global growth."