The scale of the economic slowdown became clearer today as British factory orders continued to fall and confidence among manufucturers plunged to a near 30-year low.

The CBI's monthly Industrial Trends survey showed the gauge of factory orders was -38 in November, slightly higher than the -39 recorded in October, but any figure under 50 indicates contraction, signalling that orders are still falling sharply.

Today's dire figures suggest that the fall in economic output in the final three months of the year could be more severe than the 0.5 per cent drop recorded in the third quarter.

There were hopes that the manufacturing sector would ride out the slowdown better than the financial and housing sectors, which have been badly hit by the credit crunch, but Paul Dales, of Capital Economics, said the figures suggested this was now unlikely to be the case.

"It was hoped that industry would soften the recession. These figures suggest that it will only deepen it," he said.

The CBI said earlier this week that it expected a 0.8 per cent fall in output.

Ian McCafferty, economic adviser to the CBI, said: “With a sharper and more prolonged UK recession in prospect, conditions are going to remain tough for some time,” said.

The rapid falls in inflation, coupled with dwindling demand, were reflected in the figures as no manufacturers said they expected to raise their prices over the next three months, compared with a reading of 10 per cent in October and 23 per cent in September.

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