Manufacturers have yet to feel the Brexit slowdown, but fears about the future have hit their highest level since the recession, according to the closely-watched CBI industrial trends survey.
The survey of manufacturers, published this morning, revealed output in the three months to July was rising at its fastest pace since July 2014, but only five per cent of firms said they expected things to carry on improving over the next three months. More than half, 52 per cent and the highest amount since January 2009, were markedly less optimistic about how their business would fare over the next three months.
Similarly, concerns that global economic and political instability could act as a drag on exports reached their highest level for 33 years.
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Investment intentions were markedly down among manufacturers, with the balance of those reporting increased and decreased capital expenditure on new buildings dropping from six per cent to minus 23 per cent between April and July, and the balance on plant and machinery investment tumbling from 17 per cent to minus five per cent.
Total orders over the next three months were expected to be flat, the first time firms have not expected a growing order book since January 2012. However, business output in the three months to July reached its highest level for a year as financial markets around the world stabilised after a rocky start to the year.
Rain Newton-Smith, chief economist at the CBI said: "It's clear that a cloud of uncertainty is hovering over industry, post-Brexit. We see this in weak expectations for new orders, a sharp fall in optimism and a scaling back of investment plans."
The survey comes off the back of a shocking set of post-referendum purchasing managers' indexes (PMI) last week which sent sterling tumbling. Paul Hollingsworth of Capital Economics said he believed "the evidence is mounting that the economy has taken a hit from Brexit."