The CBI's latest quarterly industrial trends survey will reveal that manufacturers' expectations for rising output over the next four months have slipped and pessimism over the level of export orders has deepened.
In its regular monthly poll in June the CBI reported that 28 per cent of companies surveyed expected output to rise in the coming four months, while 20 per cent thought their output would fall.
The latest results show that output expectations have slipped below June's positive balance of 8 per cent, generally regarded as the lowest positive balance consistent with recovery.
The CBI is therefore expected to warn that the most optimistic interpretation of its results calls for flat manufacturing output for the balance of the year.
Likewise, manufacturers are expected to report that orders for exports have slackened from the levels indicated in June, which were already on a worsening trend.
The results will strengthen demands for another cut in interest rates despite the Government's inability to act after the latest rise in German rates pushed sterling to the bottom of the European exchange rate mechanism.
The survey will also come as a blow to the Treasury, which had been hoping that signs of growth would begin to emerge later in the year.
Despite the belief of the Prime Minister that the economy will grow by up to 1 per cent this year, the evidence to date points increasingly to another year of economic decline when compared with national output for 1991.
National output fell by 0.5 per cent in the first quarter and economic statistics for the second quarter point to a flat three months at best.
Industrial production dropped in April and May, while retail sales declined in June for the first time since the general election.
The latest trade figures, for June, disclosed falling imports and exports and underscore fears of contracting markets at home and abroad.