UK manufacturing sector recovery floundering

The British manufacturing recovery is floundering, with factory orders falling at the steepest rate since April and optimism down to a 14-month low.

According to The Confederation of British Industry's monthly manufacturing report the orders balance dropped to -28 this month from -17 in September. Export orders were the worst hit since February, with their balance at -21 from -5 in September.

The balance represents the difference between the percentage of manufacturers reporting an increase or above normal orders, and those reporting a fall or below normal orders.

The CBI's quarterly survey, conducted in parallel, showed a sharp fall in business optimism to the lowest levels since July 2009.

The quarterly business situation balance fell to +2 from +10 in July, the lowest in over a year with firms expecting to lay off staff at a faster pace in the next three months than in July.

Additionally, profit margins were likely to come under pressure as unit costs were expected to rise, but firms ruled out significant rise in their prices.