UK manufacturing jobs declined at their lowest rate for two years in the past quarter, despite a fall in demand for manufactured goods over the same period, according to research by the CBI.

The survey revealed that 5,000 jobs were cut in the three months to July, compared with the longer-term average of 30,000 per quarter since 2003.

The CBI predicts further job cuts at a rate of about 8,000 in the current quarter, with the South-West and the West Midlands likely to be the hardest hit, with around 3,000 posts being lost in each region.

Doug Godden, head of economic and fiscal policy at the CBI, says: "The manufacturing sector's revival is continuing, though the rate of growth has slowed somewhat. With more firms now working flat out than at any time since early 2006, there has been a very welcome effect on jobs."

The report showed an increase in factory orders for a third quarter in a row, but at a slower rate than the previous six months.