The first three months of this year saw a sharp fall in confidence among UK manufacturers, according to the latest Confederation of British Industry quarterly Industrial Trends Survey.
The figures show 11% of firms are now more optimistic about the general business situation, while 33% are less optimistic, giving a negative balance of 22%.
Plant and machinery investment intentions are negative for the first time in five years, and to the greatest extent since October 1992.
Inflationary pressures are weak, however. Unit costs have fallen at the sharpest rate recorded in the survey’s 40-year history, with a negative balance of 15%.
The bar chart shows that long-term trends in labour productivity (measured by GDP per person employed in the business sector) have averaged about 1.8 per cent in the UK since 1979.
In a report published last month, the TUC said that while Britain’s productivity record in the 1980s was in line with the OECD average, it was based on longer hours worked rather than efficiency.
British workers now work 9 per cent more hours than German workers as an annual average, and 5 per cent more than French workers, the TUC claims.