MANUFACTURERS are continuing to feel the pressure of rising costs, with 25,000 job cuts in the past three months.

The Confederation of British Industry's (CBI) quarterly industrial trends survey revealed the figures, with North-East director Sarah Green saying manufacturers are facing "tough times".

The CBI said firms hampered by rises in the cost of gas and oil have been forced to reduce staff to relieve squeezed profit margins.

A total of 106,000 jobs have been lost in manufacturing over the past year in the UK.

Ian McCafferty, CBI chief economic advisor, said: "Conditions for manufacturers are getting increasingly tough as costs continue their seemingly inexorable rise but weak demand keeps prices down, squeezing already thin profit margins even further."

Figures recently showed manufacturers were facing the biggest squeeze between input and output prices for almost 30 years.

The CBI said yesterday that monthly factory orders fell at their sharpest rate since August 2005 - a weaker figure than analysts had expected.

However, total orders and output were expected to be broadly unchanged in the coming quarter, and price deflation eased in the three months to January, with manufacturers expecting prices to go up over the next three months.