A new CBI survey has revealed that smaller manufacturers have seen demand for their products fall continuously for two and a half years.

The quarterly survey of small and medium-sized enterprises (SMEs) in manufacturing showed that orders fell for the tenth three month period in a row between April and June.

And the smallest firms - classed as those with under 200 employees - reported worse results than their larger counterparts

The business lobby is campaigning for more assistance to be given to the struggling manufacturing sector.

A strong pound and cheaper international competition has made it difficult to compete in the crucial export sector.

Unions claimed last week that 2500 jobs have been lost in the sector every week since Labour came to power in 1997.

Simon Bartley, chairman of the CBI's SMEs council, painted a gloomy picture for the future.

"It's been a disappointing year for UK manufacturers so far," he said.

"Recovery in our major overseas markets has proceeded tentatively and increased spending by consumers and government does not appear to be benefiting this sector very much.

"SMEs have not escaped these difficulties. They will, if anything, be more financially vulnerable than their larger counterparts.

"Looking ahead, we must hope that low interest rates around the globe will improve the sector's fortunes.

"But at the moment the signs are that SMEs in manufacturing are continuing to struggle."