The recession in UK manufacturing appeared to be easing today with hard-hit firms more upbeat about the outlook.

The Confederation of British Industry conducted a survey which showed that output continued to fall in the last three months but at a much slower pace than before.

Some 34% of firms said output fell compared with 26% which said it rose, giving a balance of minus 8%, far narrower than the minus 31% recorded in July. The survey also found manufacturers are more optimistic than they have been since March last year before the recession struck.

Ian McCafferty, CBI chief economic adviser, said: "Having endured a brutal recession, manufacturers appear to be turning the corner, with optimism up and mild growth in output and demand expected over the next three months.

"Firms seem to be benefiting from a weakened pound, as global markets recover, helping to lift demand for UK exports. However, the recovery from the downturn will be protracted - investment will remain constrained and unemployment will continue rising.

"The tight flow of credit to many manufacturers remains a worry, and firms which are unable to get funding to meet orders could see their hopes of recovery stall."