Business confidence has fallen sharply among manufacturers in the North but the region is likely to escape widespread job losses expected throughout the rest of Britain in the next quarter, according to a new industry survey.

The latest Regional Trends Survey conducted by the Confederation of British Industry (CBI) shows the UK's manufacturing sector faces the prospect of a further 29,000 job losses by September.

According to the results of the survey, which was published yesterday, export prospects have slumped in the UK and manufacturers expect severe job losses across all regions bar two: Northern Ireland and south-west England.

The CBI said that over the past four months, manufacturers had reported significant job cuts in the north-east, the east midlands, the north-west, Yorkshire and Humber.

But job losses have also been reported in the south-east, east of England and west midlands, while Scotland has delivered its worst performance for two years.

"Some 36 per cent of those surveyed throughout the UK said they were negative about employment prospects; just 9 per cent were positive.

"This is the weakest expectation since January 1999," the industry body said.

Although business confidence declined across the UK in the last quarter, the confederation said one of the sharpest drops had been reported in Northern Ireland.

Confidence levels in the North are now among the lowest in Britain, with only Scottish manufacturers showing similar levels of concern about the future.

Their apprehension is reflected in data released by the British government earlier this week, which showed the UK's manufacturing sector is in recession.

According to Mr Peter Gutmann, associate director of London-based consultancy Business Strategies, international developments are making life very tough for manufacturers.

However, Northern Ireland appears to buck the trend in some instances, according to the latest research.

It is more optimistic about export orders than in some parts of the UK, with some companies expecting employment levels to increase.

According to Ms Deirdre Stewart, of the CBI in the North, manufacturers are insulated to some degree because of the large public sector in Northern Ireland.

"Manufacturers are supplying into this public sector which is much larger than in other parts of the UK, despite the fact it is now subject to some level of cutbacks.

"There is also a lot of cross-Border trade going on with the Republic of Ireland which has helped local manufacturers despite the effects of the currency differential.

"But traditional manufacturing has been suffering for quite a while in Northern Ireland and it remains difficult for all manufacturers," Ms Stewart said.

According to Sir Reg Empey, the North's Minister for Enterprise, Trade and Investment, traditional sectors have a crucial role to play in ensuring the economy is balanced and stable.

"It cannot be emphasised enough how important small businesses are to the economy of Northern Ireland.

"Particularly, those companies which are competitive externally and are bringing their products and services to wider markets beyond these shores," the Minister said.