Manufacturers are facing a short term crisis with no recovery expected for at least a year, the TUC has warned.

As part of the TUC's budget submission, union leaders on Thursday called on chancellor Gordon Brown to find £900 million to help rebuild the sector and improve productivity.

A report published ahead of a conference on the budget painted a bleak picture of stagnation in output and investment levels in a sector that is also being hit by the high value of sterling.

It found manufacturing's productivity gap has worsened since the mid 1990s, a blow to Gordon Brown who believes improving output to the levels of international rivals is vital to improving the economy.

Output per worker is 50 per cent behind the US and Japan and 30 per cent behind France and Germany. Manufacturing investment is also down; investment per hour worked is 30 per cent higher in the US and Germany and 80 per cent higher in France.

The proportion of workers without qualifications has also increased.

The TUC backed sustained government investment to boost research and development, training and regional aid.

TUC general secretary John Monks called for the chancellor to act if the UK was to have world class manufacturing.

"The manufacturing sector lost 150,000 jobs last year. This budget should be the first step, not the last word. We are still waiting for manufacturing strategy that deals wit the current recession, moves us forward and then takes us into the future.

"Britain once had a world class manufacturing sector and with 'smart-support' from government we can do again," he said.