British industrialists have scaled back their plans to boost their output this spring, responding to a worsening in their order books for the home market and diminishing confidence in their ability to pass on to their customers' relentless increases in the cost of fuel and raw materials.
The CBI's industrial trends survey for March shows 30 per cent of the 755 respondents saying they expect to increase their output in the coming three months, while 21 per cent expect a fall.
The resulting balance of of nine per cent is down sharply from 19 per cent in February. But mechanical engineering and textiles are the only groups indicating a decline.
The weakening in order books in the last month has been confined to the home market.
Those describing their export orders as "below normal" outnumber those saying they are "above normal" by 18 per cent of the sample. But that is a small improvement on an adverse balance of minus 20 per cent in February and a material improvement on minus 26 per cent in the January survey.
For order books as a whole, though, the position has worsened, with an adverse balance of minus 13 per cent this month. That is back to where it was in January after an improvement to minus ten per cent in the February survey.
Manufacturers are struggling to lift orders amid challenging economic conditions," said Ian McCafferty, the CBI's chief economic adviser. "Oil prices rose by a further 15 per cent over the past month alone.
"The slow rate of output growth will not help prevent further job losses in a sector which has shed one million jobs since 1997. Demand has been subdued so far in 2005 and firms do not expect this to improve any time soon."
The number of industrialists confident that they can raise their prices this spring is also falling off sharply.
There is still a balance of nine per cent over those who expect to cut their prices. But that is down from 19 per cent in February.
The CBI pointed out that oil prices alone increase by 15 per cent between February and March.