UK manufacturers said new orders in the three months to July declined for the third straight quarter, although the pace of falls eased slightly, a key survey found today. The Confederation of British Industry's quarterly industrial trends survey showed that total order books remained well below normal in the three months to July. Thirty-one percent of firms reported that new orders fell over the past three months while 24 pct reported an increase, resulting in a net balance of -7 pct in the three months to July compared with -18 pct in the 3 months to April. The improvement was due to the first rise in export orders since October 1995. The better showing was largely confined to mechanical engineering, motor vehicles and transport equipment -- due to sterling's lower trade weighted exchange rate. The pick-up in export orders helped offset weak domestic orders, the survey said. Looking ahead, firms scaled back expectations for orders in the coming three months to the lowest level since July 2003. In terms of costs, input prices slowed sharply but at the same time domestic prices also fell, putting pressure on profit margins. Against this backdrop, manufacturers say they are more pessimistic about the general business situation than they were three months ago. Thirty-three pct of firms said they were less confident while 17 pct reported a rise in optimism, leading to a net balance of -16 pct which also represents the fourth straight decline. Manufacturers' intentions for investment were also weak with spending on plant, machinery and buildings expected to decline over the coming year. "Whilst demand from abroad has helped manufacturing activity to hold up over the past three months, developments here in the UK have kept the sector under significant pressure," said Ian McCafferty, CBI chief economic adviser. He added that falls in domestic orders alongside pressure on pricing power and profitability has affected confidence levels. Manufacturers, however, expect a slight pick-up in output over the next three months. "These results reinforce the case for a cut in interest rates on Aug 4," he added. The monthly industrial trends survey for July showed that total order books improved to a net balance of -20 pct from -25 pct in June, better than expectations for a smaller improvement to -23 pct.