Confidence falling with factory order slump
Britain's manufacturing base is suffering a crisis of confidence. Sentiment in the sector - still around 30% of the UK economy - is plunging as firms prepare for lower orders from customers.
That's the conclusion drawn from the CBI's latest Quarterly Industrial Trends survey, a closely watched measure of economic confidence.
Factory orders fell in October at their fastest pace for a year, a sign that the eurozone crisis is affecting business badly.
CBI chief economic adviser Ian McCafferty said: "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."
The sentiment index fell to -30 from -16, its lowest since April 2009.
In line with expectations of falling orders and stocks, manufacturers also expect output to fall over the next three months. This would be the first decline since October 2009. They also anticipate a slight reduction in headcount.
Samuel Tombs of Capital Economics said: "The CBI's survey provides a strong indication that the overall economic recovery is unlikely to receive support from the industrial sector any time soon."
