Commenting on the survey, CBI director of economic analysis, Sudhir Junankar, said despite falling confidence levels, plant and machinery investment intentions were surprisingly not negative in nearly all regions.
"For the first time since the UK economy slowed during 1999, firms consider uncertainty about demand to be the key constraint on their investment plans. With inflation prospects good, this gloomy picture across most regions suggest there is nothing to stop a quarter point cut in interest rates this week," he added
Peter Gutmann, Associate Director of Business Strategies, said the manufacturing sector has failed to sustain the gradual upturn in output seen at the end of last year.
"This has happened against the weakening global background and with sterling holding up against the euro. With the downturn spreading to new economy sectors such as electronics, further widespread job losses are inevitable, and the south of England can expect to share the pain."