New figures show that the manufacturing industry remains stuck in a rut and that the hoped-for recovery in the sector is disappearing fast.
The Confederation of British Industry (CBI) data shows that output, demand and input prices are all weighing against businesses in the embattled sector.
Almost a third of companies said order books were below normal against only 16 per cent claiming it was above normal, the balance of minus 16 per cent compares with minus 12 per cent last month.
Meanwhile, expectations for output growth over the next quarter fell to their weakest point since December 2003.
The survey also showed that cost pressures remain fierce, although both oil and metal prices have eased slightly since October. Firms were only slightly more confident about increasing their prices over the coming quarter than they were last month.
Doug Godden, CBI head of economic analysis, said: "Weaker demand from home and abroad is clearly hampering the manufacturing recovery. Export orders were particularly badly hit during November.
"The survey suggests that the global upturn in demand for capital goods, which had sustained manufacturers' orders through this year, has been set back in the face of high oil prices and more moderate growth in the United States and elsewhere."
The bleak picture for manufacturers, coupled with weakening retail sales, rising interest rates and a precarious housing market led the CBI to revise down its forecasts for UK economic growth.
It revised UK GDP growth for 2005 down by 0.3 per cent to 2.5 per cent. Looking ahead to 2006 for the first time the forecast predicts growth of 2.6 per cent.
"Slower growth in employment and real disposable incomes will knock consumers' ability to spend while higher interest rates and a weaker housing market will undermine their willingness to spend," said the group.
