UK manufacturers are enduring a tough end to 2015 amid “gathering gloom” from the global economy, according to the industry body EEF.
It has cut its forecast for the sector and expects it to shrink by 0.1% this year, but growth of 0.8% is projected in 2016.
Britain’s factories have been struggling despite the recovery in the wider economy and manufacturing remains below 2008 levels, prior to the recession. The recent strength of the pound has held back overseas sales.
UK growth has relied heavily on domestically focused services, frustrating hopes that it can be re-balanced to a more export-led expansion.
The latest report from EEF found output and new orders deteriorating at rates not seen since the depth of the recession in 2009.
EEF chief economist Lee Hopley said: “Concerns about world trade growth and the strength of demand from both developed and emerging markets have become more prominent … since our last report.
“Closer to home, the domestic market is also looking considerably less supportive than has been the case in recent years.”
Low oil prices have hurt manufacturers that supply and service the sector, the report said.
Official figures for manufacturing are due on Tuesday. They are expected to show output stagnated in October.