Confidence in the UK manufacturing sector has fallen in every region of the UK for the first time in a year.
The latest quarterly regional trends survey, published by the CBI and Experian Business Strategies, showed the number of firms working below capacity rising to 74 per cent, a 20 year high.
Employers in all regions except Northern Ireland plan to cut staff in the first four months of 2003. the report predicts around 42,000 job losses by the end of April. Job cuts are expected to be highest in the West Midlands, followed closely by the South East and London, the North West and Wales.
The sharpest falls in business confidence were recorded in the East of England, the Midlands, the North West and Scotland.
Peter Gutmann, Associate Director of Experian Business Strategies, put much of the blame for this gloomy outlook on weak demand for exports.
"The gloomy tone in this survey is consistent with the tough time manufacturers are facing in export markets." He said. "Global demand is still weak and there are clear downside risks to the sluggish upturn expected this year."
With profit margins under pressure, firms in all 11 regions said they had no intention of increasing investment in plant and machinery. The most negative intentions were recorded in the South East and London, Northern Ireland, Wales and the South West.
But despite the prevailing gloom, seven regions expected manufacturing output to pick up in the coming months, with the North East the most optimistic.
Doug Godden, CBI Head of Economic Analysis, said: "With further job losses on the horizon, manufacturing confidence has deteriorated right across the UK. This had not happened for a year, despite the manufacturing recession. Weak international demand is pulling operating levels further away from full capacity. In this difficult climate, firms have no intention of increasing investment, but it is encouraging that many regions expect output to pick up."