Industry is gloomy about its prospects across every region of the UK, according to the Confederation of British Industry (CBI).

The gloomy tone in this survey is consistent with the tough time manufacturers are facing in the export markets Peter Gutmann, Experian Business Strategies

For the first time in a year confidence is down across the entire country, with all regions, except Northern Ireland, expecting job cuts.

The CBI is predicting around 42,000 redundancies by the end of April.

Its survey comes as the Bank of England gears up for its monthly interest-rate meeting.

Weak demand

The Bank cut interest rates to a 39-year low of 4.0% in 2001 in an attempt boost manufacturers.

But it is reluctant to cut rates any further because of fears of further heating up the housing market.

The CBI has said it will not be calling for a rate cut because the main problem for industry was weak international demand.

The CBI's latest regional trends survey, published with Experian Business Strategies, showed job cuts were expected to be highest in the West Midlands.

This was followed closely by the South East and London, the North West and Wales.

The sharpest falls in business confidence were recorded in the East of England, the Midlands, the North West and Scotland.

Firms in all 11 regions said they had no intention of increasing investment in plant and machinery.

Optimistic

The most negative intentions recorded in the South East and London, Northern Ireland, Wales and the South West.

Yorkshire and the Humber had the highest percentage of firms working below capacity (79%), while Northern Ireland had the lowest (51%).

But despite the prevailing gloom, seven regions expected output to pick up in the coming months.

The North East emerged as the most optimistic region.

Peter Gutmann, associate director of Experian Business Strategies, said: "The gloomy tone in this survey is consistent with the tough time manufacturers are facing in the export markets."

Weaker pound

But, he added, there were signs of optimism from some regions.

And the pound's depreciation against the euro in recent weeks "could provide a little relief for hard-pressed manufacturers in the months ahead".

Doug Godden, CBI's head of economic analysis, blamed "weak international demand" for factories standing idle.

"In this difficult climate, firms have no intention of increasing investment, but it is encouraging that many regions expect output to pick up," he added.

Below capacity

Commenting on the survey, Mark Wealleans, of Liverpool-based manufacturer Ley Rubber, said he thought prospects for the UK's manufacturers were "not looking great for the next 12 months".

"Europe is in a much better position than we are and the states is in a much better position than we are, with lower interest rates for investment," he told BBC One's Breakfast.

The regional trends results were taken from the 904 replies to the CBI's quarterly industrial trends survey received between 12 December and 8 January.

Last week, CBI said 42,000 manufacturing jobs will go in the first three months of this year, slightly lower than the 45,000 lost in the final three months of 2001.

It said 74% of UK factories were now working below capacity, their worst performance for 20 years.