Business confidence among small and medium sized manufacturers in the UK has fallen dramatically since the beginning of the year.
The balance of businesses that felt optimistic about their prospects fell from plus seven in January to minus 30 in April, according to the CBI.
During the last three months manufacturing output fell at its fastest rate since October 1999, creating a pessimistic outlook among small firms and to a slightly lesser extent medium sized companies.
Prices and unit costs are also falling and as a consequence UK manufacturers are seeing their profit margins being squeezed.
CBI spokesman Simon Bartley, said, “Last week’s quarter point cut in interest rates was timely but it remains to be seen whether or not it makes small and medium enterprises more confident about investing in the future.”