New survey shows small manufacturing firms face weak orders and see little incentive to raise investment.

Small British manufacturing firms are their most pessimistic since just after the Brexit referendum in 2016 as they face political uncertainty at home and trade wars abroad, according to a survey published on Wednesday.

The Confederation of British Industry’s gauge of optimism for small and medium-sized manufacturers fell to minus-32 percent in the three months to the end of October, down from minus-28 percent in the three months to July.

The figures represent the difference between the proportions of respondents who said they were optimistic against those who expressed pessimism about the future.

Companies reported weak new orders – especially from clients in Britain – and little enthusiasm to raise investment spending.

“Firms are caught between the perfect storm of perennial Brexit uncertainty at home, and sluggish growth in the global economy,” Alpesh Paleja, the CBI’s lead economist, said.

“As well as hitting output, orders and hiring, these issues are depressing investment plans across the board.”

Whichever political party wins Britain’s December 12 national election must ensure the country leaves the European Union with a transition deal and then push ahead with negotiations for a new, long-term trade relationship with the bloc, he said.

Britain’s economy shrank in the second quarter of 2019 but is widely expected to have shown some growth in the July-September period, thus avoiding a recession.

As well as Brexit, British manufacturers are facing up to a slowdown in the global economy caused by trade tensions between the United States and China.

The CBI’s survey showed almost two-thirds of the 240 companies which took part cited political or economic conditions abroad as likely to limit export orders, a survey record high.