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Political uncertainty over Brexit is weighing on business funding, which has fallen to the bottom degree for a 12 months, a survey signifies.
The analysis, from manufacturing physique EEF and accountancy advisers BDO, stated the outlook for UK producers was "slightly more subdued than it has been for some time".
The ballot of greater than 300 corporations discovered they have been "cautiously optimistic".
However, the EEF stated development was wanting "fragile".
"Manufacturers are still seeing a positive picture and business confidence indicators are holding up looking forward to the second half of the year," it stated.
But it pointed to "the easing of global growth" and instructed that "the continued political uncertainty of Brexit negotiations is weighing on investment".
EEF chief economist Lee Hopley stated: "We proceed to see indicators of development throughout manufacturing and, given weaknesses elsewhere within the UK economic system, it's vitally essential that we maintain this.
"However, the durability of this upturn is looking somewhat more fragile as many of the positive forces driving expansion last year, such as a resurgent eurozone, a surge in global manufacturing investment and competitive pound, are starting to fade."
Ms Hopley added: "New or heightened uncertainties have additionally come into play, not least what looks like crunch time within the Brexit negotiations, which have led to amber lights flashing once more on the business funding outlook.
"This matters both for growth now and our longer-term productivity prospects."
BDO's Tom Lawton referred to as on the federal government to not "lose sight of the needs of manufacturing, or indeed the wider economy, during the continuing EU negotiations".
He added: "I have no doubt that UK manufacturing will not stop to be successful, but the right support and trading environment will make a huge difference to manufacturers."