The strong pound and weak Asian demand is continuing to hit exports, with manufacturers recording a sharp fall in new orders for May.
More than 25% of manufacturers questioned for a Chartered Institute of Purchasing and Supply survey said that their export orders were lower for May than April.
Manufacturers cut purchasing for the fourth time in five months in an effort to reduce costs by holding lower stocks and in anticipation of a slowdown in activity, the report says.
Stocks of purchased materials and components fell, with one in five firms saying it was destocking.
Stocks of finished goods fell for the sixth successive month.
Relief in sight, page 16