Falling demand for UK factory made products has left manufacturing confidence at its lowest level since 1980, according to a new survey.

Research by the Confederation of British Industry (CBI) revealed that 46% of manufacturers had experienced a drop in orders with 60% of manufacturers surveyed admitting that they were less optimistic about general business conditions that they were three months ago – the biggest single quarter drop since 1980.

The news will make grim reading for those employed in manufacturing – an industry which is historically resilient against economic turmoil, having seen the number of redundancies and company collapses in the housing and financial markets.

Ian McCafferty, the CBI’s Chief Economic Adviser, said: “This survey was conducted during a period of exceptional economic turbulence, so it is unsurprising that confidence has taken such a hit. However, the sharp falls in orders and output show that the slowdown in the UK economy is now spreading to sectors previously resilient to the weakness in the banking and housing markets.

“It is also of serious concern that constraints on capital now appear to be affecting manufacturers, in a way that had not been the case earlier.

“We can but hope that the recapitalisation of banks and the cut in interest rates, which took place just as the survey closed, will prevent a further credit squeeze over the winter.”