Small and medium-sized manufacturers are likely to invest less and create fewer jobs after having their confidence in future growth undermined, according to the Confederation of British Industry.
Manufacturing SMEs say they are reappraising business plans in the wake of declining optimism about prospects, despite strong growth in total orders and an above average rise in factory output.
CBI SME Council chairman Lucy Armstrong said: “Orders and production have been strong for the UK’s smaller manufacturers this quarter, but growth is expected to stagnate in the next, and sentiment has fallen for the first time in two years.
“Confidence has also been affected by global economic and political uncertainty over issues such as the euro crisis and the US debt ceiling. As a result, manufacturers are re-assessing their business plans. They do not expect to take on any more staff in the next three months and intend to invest less in the year ahead.”