Orders at their lowest since the crash, UK manufacturers report

Figures from EEF, the manufacturers' organisation, and advisory firm BDO showed particularly poor responses from firms with a high level of reliance on exports. Firms exposed to the European markets were particularly affected by weakening demand, according to the figures, which show a negative response on exports for the first time since 2008/09.

The survey said that the orders were lower than any time since "the end of the 2008/2009 recession". The technical definition of a recession is a period of two consecutive quarters in the same year where the economy shrinks. The recession which began in spring 2008 ended in summer 2009, though the UK slipped back into recession in 2010.

There was good news in some sectors, particularly transport and mechanical equipment, according to the survey. However, EEF has now halved its projected growth in manufacturing output for 2013 to 0.7% ahead of the Chancellor's Autumn Statement on Wednesday.

"The extent to which industry confidence has fallen since this year's Budget makes it ever more urgent for the Government to get to grips with growth and get behind companies seeking to invest and succeed in new export markets," Terry Scuoler, chief executive of EEF, said. "The Autumn Statement should prioritise measures to support investment through the tax system and to increase competition in business banking."

He called for these announcements to form part of a "concerted, joined up, cross-government growth plan".

"Individual measures on their own are not enough," he said. "They should be part of a Growth Plan that demonstrates to business that all of government has a week-in, week-out focus on growth."

According to the survey, both manufacturing output and outstanding orders fell for the third quarter running, with no increase in activity planned in the short term. Export orders contracted and were also weaker than domestic orders, something the quarterly survey has only recorded once since 2008.

The uncertainty had also impacted on recruitment intentions in the sector, with no firms planning to take on new staff. This was the first time the survey had not reported a positive trend in recruitment since the middle of 2010, EEF said.

Tom Lawton, head of manufacturing at BDO, said that the reduction in exports was of particular concern.

"Whilst this mostly reflects the turmoil in the eurozone, it also highlights the scale of the challenge in growing exports to emerging markets to offset the downturn in much of Europe," he said. "On a more positive note, investment intentions seem to be defying gravity but the ongoing issues around access to capital and an unsupportive tax structure may yet have a serious impact on actual investment."

Surveyed firms returned a positive score on their future investment intentions; however EEF commented that this figure too had weakened over the past three months to the lowest level for almost three years.