MANUFACTURERS were offered a glimmer of hope last night after research showed order books at their highest level for nine months.
But the Confederation of British Industry's (CBI) industrial trends survey also found that firms did not expect a knock-on effect on output during the next three months.
The latest monthly research came as the CBI also scaled back its forecasts for economic growth, blaming the UK's "anaemic performance" in the first half of the year and a slow recovery in global demand.
The employers' organisation now believes UK growth will average 1.8 per cent this year, down from the 2.1 per cent originally forecast and below the range of two per cent to 2.5 per cent signalled by Chancellor Gordon Brown in April.
Ian McCafferty, CBI chief economic advisor, said: "We were expecting the route to recovery to be long and difficult, but even so, the first six months of the year have been disappointing.
"It is clearly going to be a long haul and this means UK growth will remain lacklustre for some time yet."
With lower growth reducing government tax revenues, the CBI also predicts government borrowing will rise to £32.5bn in 2005.
Despite the gloom, the CBI expects next year to provide the manufacturing sector with its first rise in output for four years.
In the meantime, the CBI said conditions facing manufacturers remained disappointing, with 36 per cent of firms reporting order books below normal.
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