LONDON (Reuters) - Smaller British manufacturers expect their output to dip for the first time in seven years during the next three months, hurt by sagging order books ahead of Brexit, an industry survey showed on Wednesday.
Domestic orders flatlined and manufacturers reined in their investment plans, the quarterly survey of small- and medium-sized enterprises (SMEs) from the Confederation of British Industry (CBI) showed.
The report adds to a string of downbeat signals from manufacturers ahead of Brexit, now due in less than five months.
Prime Minister Theresa May faces opposition to her Brexit plan from within her own Conservative Party, and has also failed so far to reach agreement with other EU leaders, raising fears that Britain could leave the EU without a transition deal.
"SME manufacturers are clearly feeling the pressure: both from softer global economic momentum, reflected in a tailing-off of exports orders, and Brexit uncertainty biting hard on investment plans," CBI economist Alpesh Paleja said.
Optimism about export prospects for the year ahead waned to the weakest level since April 2009, during Britain's last recession.
"(A) significant scaling back of planned capital spending is further proof that Brexit uncertainty is taking a real bite out of firms' plans to grow and innovate," Paleja said.
(Reporting by Andy Bruce, editing by David Milliken)