SME manufacturing output volumes fell at the fastest rate on record, according to the latest quarterly Confederation of British Industry (CBI) SME Trends Survey.
The survey of 331 small and medium-sized enterprise (SME) manufacturers reported that output volumes were down by 53% in the three months to July, the worst quarter since October 1988.
In addition, total new orders in the three months to July were down 56%, the quickest pace on record, reflected in the fastest falls on record in both domestic and export orders.
However, business sentiment in the quarter to July improved slightly, following its record pace of decline in April, while firms expect output to recover at a slow pace in the next three months.
Commenting on the figures, Alpesh Paleja, Lead Economist at the CBI, said: 'SME manufacturers faced an exceptionally challenging quarter due to the coronavirus (COVID-19) crisis. While firms believe that the worst of the downturn is behind them, ongoing cashflow issues and tough trading conditions mean that they aren't back on their feet yet. Expectations of another heavy fall in headcounts is a sign of what is to come.
'It's clear that firms need more immediate support, from grants to further business rates relief, to tide them over until demand conditions improve more substantially.'