Figures have showed another drop in manufacturing export orders amid weakening eurozone demand.
The decline for the three months to January dashed industry expectations for an improvement and came as the latest quarterly survey by the CBI business lobby group showed disappointing output growth for the period.
There was some encouragement in the report, however, as more firms expect both orders and output to rise moderately over the next three months.
Out of 389 manufacturers, 25 per cent of respondents to the CBI's industrial trends study said new orders rose, while 28 per cent said they fell.
The resulting rounded balance of minus 4 per cent compared with expectations for an improvement of plus 8 per cent.
The balance for export orders fell for the third consecutive quarter, although the decline was at a slower rate than previously.
Output growth was broadly flat for the second consecutive quarter, the CBI added.
Anna Leach, its head of economic analysis, said: "While domestic demand and business optimism have steadied, export demand remains a concern for manufacturers, with orders continuing to fall, albeit at a slower rate.
"There are encouraging signs of stability in overall demand, however, with domestic orders, export orders and production expected to rise in the quarter ahead."
Samuel Tombs, UK economist at consultancy Capital Economics, said: "Amid continuing signs that the eurozone's recession is deepening, 2013 looks set to be another tough year for UK manufacturers."