The Q3 Manufacturing Outlook survey comes on the back of the latest PMI data earlier this week and shows all indicators have weakened significantly, with investment and domestic orders in particular turning negative.

The survey also shows that a weaker currency is providing no solace, contrary to claims from some politicians and commentators, with export orders down despite prices falling. This indicates foreign customers are not buying British goods even though they are 6% cheaper than this time last year.

Seamus Nevin, chief economist at Make UK, said: “Industry is facing a perfect storm of factors, compounded by a hard Brexit which could not be coming at a worse possible time. In normal circumstances a global slowdown on its own would be enough, but add trade wars and the biggest shock to our economy since the War and there seems little doubt that, barring a remarkable turnaround, the sector may be heading for recession.”

Tom Lawton, head of manufacturing at BDO, said: “Global competition, skills shortages, lack of a coherent industrial strategy from government and continuing technological disruption has made UK manufacturing a challenging sector for decades. The long shadow cast by the possibilities of a no deal Brexit and the uncertainty of recent months has only added to the difficulties for the sector.

“A cliff-edge decision on a deal or no-deal Brexit will mean a double whammy of continuing weaker demand for products and fundamental disruption to supply chains. The impact on supply chains will be particularly felt in the UK automotive sector where car parts are sourced from different European countries and delivered on a just in time basis before being finally assembled in the UK.

“Already suffering from a fall in output for 14 successive months, car assembly – the jewel in the crown of UK manufacturing – would be particularly hit hard by a no-deal Brexit. The Government must strain every sinew to reach a Brexit deal that protects UK manufacturing.”

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According to the survey, the total order balance, whilst still just in positive territory, fell to +2% in Q3 (down from +8% in Q2 and +16% in Q1) indicating the significant rate of weakening which has taken place since the start of the year. At current trend, according to Make UK this will almost certainly turn negative in the final quarter of the year barring a remarkable turnaround in the economy.

As a result of this weakening picture, Make UK is now forecasting manufacturing growth of just 0.1% in 2019 (down from 0.2%) and an anaemic 0.6% in 2020 (down from 0.8%). GDP is forecast at 1.1% in 2019 and 1.4% in 2020. (All these forecasts are based on avoiding ‘no deal’)

The survey of 292 companies ran from 31 July to 21 August.