Slowdown

Manufacturers' orders and output fell faster than had been expected over the past three months, according to the

's quarterly Industrial Trends Survey, published today.

The survey shows that July's unexpected pick-up in export orders was not sustained, but the greatest deterioration was in domestic orders, a result of continued weakness in consumer spending.

Profit margins continued to be squeezed as costs increased and more firms cut prices than increased them. A further slide in business optimism has weakened investment decisions, with expenditure on both plant and machinery and buildings expected to decline over the coming year.

Thirty-four per cent of firms saw the volume of total new orders decrease over the past three months, while 20 per cent saw an increase. The balance of minus 14 per cent shows a faster rate of decline than in the last quarter (-7 per cent) disappointing previous expectations (-2 per cent).

Domestic orders declined at the fastest pace for two years with 35 per cent of firms reporting a fall over the past three months and 12 per cent an increase. The balance of minus 23 per cent compares with minus 16 per cent in the July survey.