Manufacturing output 'expected to fall'

UK manufacturing output is expected to fall in the next three months, a new survey has found.

The survey, carried out by the Confederation of British Industry (CBI) and Experian, showed that the majority of UK manufacturers expect production to fall in the months up to October.

Seven UK regions reported a drop in total orders over the past three months, and the majority of regions expect significant job losses in the next few months. The West Midlands, Yorkshire, Northern Ireland and South East England are expected to be the worst affected as demand slows.

The CBI predicted that 36,000 manufacturing jobs could be lost over the rest of the year.

Last month, government statistics revealed that manufacturing prices were up 10% on the year before. The price increase and the predicted slowdown in production have been blamed on the rising costs of oil and petrol.

"The climb in oil and other raw material prices over recent months has driven costs up significantly," said Lai Wah Co, the CBI's head of economic analysis. "Although firms are having some success in passing these costs on, profit margins are under pressure."