These are the main findings in the latest regional trends survey from the Confederation of British Industry and Business Strategies.

It says that orders and output are likely to stabilise and could even rise in many regions in the coming months, but adds that this is not enough to put a stop to job shedding.

Many manufacturers reported that during the first quarter of 1999 the squeeze on orders had eased, although firms in the North East and Scotland reported sharp cuts in output and employment, along with the steepest declines in new orders.

Andy Schofield, Business Strategies' senior economist said: "There have been steep job losses in most regions over the past few months and further falls, albeit less rapid, are still in the pipeline.

"This is even the case for the South East region where, despite stabilisation in orders and output, job losses are expected to continue unabated."

Manufacturers in the South East are generally more optimistic since the previous survey - a result of their concentration on consumer goods rather than heavy industrial manufacturing.

Sudhir Junankar, the CBI's associate director of economic analysis, said: "Unfortunately, sterling has strengthened since the last survey and manufacturers have also been hit by higher real interest rates than enjoyed by their foreign competitors."

He added the survey provided evidence that the recession in manufacturing is getting towards the bottom of the cycle despite the gloomy outlook for employment.

BYKEITHWINSPER

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.