Manufacturing output in small and medium sized businesses (SME) fell at the quickest pace in over a decade in the last quarter.
The sharp fall is largely attributed to the COVID-19 crisis, with more than 80% of firms saying measures to contain the outbreak had a negative impact on their domestic output.
The survey of 301 SME manufacturers, conducted by the CBI, found total new orders in the three months to April fell at the fastest rate in seven years.
Domestic orders fell at broadly the same pace as the previous quarter, while export orders dropped at their quickest rate since October 2015.
Business sentiment in the quarter to April dropped by its fastest on record, while export sentiment also fell at a survey-record pace.
Looking ahead, manufacturers expect output to plunge at a faster pace next quarter, marking the weakest expectations since records began in 1988.
The survey also found more than half of firms had partially shut down or closed UK production and temporarily laid off staff. Headcount in the quarter to April fell at the quickest pace since October 2009 and firms expect employment to continue to fall rapidly in the next quarter.
Alpesh Paleja, CBI lead economist, said: “SME manufacturers are seeing a sharp shock to activity due to the COVID-19 outbreak, with expectations signalling a sharper downturn to come. Nonetheless, manufacturers are doing all they can to support communities and employees during this difficult time.
“The government’s support schemes have been a real lifeline for businesses so far, and they should remain conscious of getting money to those who need it quickly. This will be a critical step to restarting the economy once it is safe to do so, which will require a strong partnership between government and business.”